The conglomerate said in its earnings release that early signs of recovery in urban demand were visible during the quarter, while rural consumption continued to demonstrate resilience. ITC said expectations of a normal monsoon and kharif crop sowing trends augur well for the rural economy.
The first quarter performance of ITC was largely in line with street estimates. While the results were declared after share market trading hours, the ITC scrip closed on Friday at a gain of 1.14% at Rs 416.5 per share at the BSE when the benchmark Sensex fell by 0.72%.
ITC’s flagship cigarette business net segment revenue went up 7.6% yoy in the second quarter at Rs 8520 crore. The country’s largest cigarette manufacturer said the premium cigarette brands continue to perform well while it reinforced its market standing through market interventions with focus on competitive belts and to counter illicit trade.
The cigarette business segment profit before interest and taxes (PBIT) went up by 3.7% yoy at Rs 5145.2 crore. The company said consumption of high-cost leaf tobacco inventory weighed on margins while there is a moderation in procurement prices in the current crop cycle.
ITC’s FMCG business net segment revenue was up by 5.2% yoy at Rs 5777 crore. The company said excluding the notebook business which continues to operate under deflationary conditions due to low-priced paper imports and stiff competition from local brands, the business grew revenue by 8.6% yoy.Categories like staples, biscuits, dairy, premium personal wash, homecare and agarbattis sales drove growth, while the beverage business was impacted by unseasonal rains.The FMCG business EBITDA (earnings before interest, taxes, depreciation and amortisation) was Rs 545.5 crore as compared to Rs 619.3 crore a year back. ITC said prices of major commodities such as edible oil, wheat, maida, cocoa and soap noodles remained elevated on a yoy basis which weighed on margins.
The company’s agri business segment revenue was up by 39% yoy at Rs 9685 crore driven by trading opportunities in bulk commodities and exports of leaf tobacco. The segment PBIT was up 22% yoy at Rs 433.8 crore.
The paperboards, paper and packaging segment revenue was up 7% yoy at Rs 2115.7 crore driven by higher volumes, while segment PBIT declined to Rs 162.6 crore from Rs 261.3 crore a year back. ITC said muted realisations and high wood prices impacted margins.
At a consolidated level, ITC’s gross revenue was up by 19.5% yoy at Rs 23,129.3 crore while net profit up by 5% yoy at Rs 5343.4 crore. The company attributed this to “strong performance” by group companies led by its IT business ITC Infotech, Surya Nepal and the hotels entity ITC Hotels Ltd.
