ITC net jumps 38% in Q1 on growth across segments

Riding on the back of higher growth across various segments including agri business, hotels, cigarettes, FMCG and paperboards, ITC Ltd registered 38 per cent rise in standalone net profit at ₹4,169 crore for the quarter ended June 30, 2022, against ₹3,013 crore in the same period last year.

Revenue from operations increased by nearly 41 per cent to ₹18,320 crore during the quarter under review as against ₹12,959 crore in the same period last year.

The diversified conglomerate, which reported numbers well ahead of street expectations, saw its scrip touch 52-week high of ₹308.80 on the BSE on Monday. The company’s scrip closed at ₹307.55, up 1.52 per cent, on the BSE.

Sequentially, net profit was marginally down by less than one per cent compared to ₹4,191 crore during the quarter ended March 31, 2022.

According to market sources, the company’s hotels business registered the highest quarterly revenue and highest profits ever in over 14 years. The agri business and FMCG segments also reported highest ever quarterly revenues.

Segmental performance

Revenue from cigarettes business grew nearly 29 per cent to ₹6,609 crore (₹5,122 crore). Segment EBIT was up nearly 30.1 per cent on a year-on-year basis.

“Stability in taxes on cigarettes, backed by deterrent actions by enforcement agencies, enable green shoots of volume recovery from illicit trade. Market standing reinforced through focused portfolio/market interventions and agile execution,” the company said in a press statement.

The other FMCG business, which included branded packaged foods, education and stationery, personal care and safety matches and agarbattis, grew 19 per cent to ₹4,451 crore (₹3,726 crore) during the quarter under review.

There was a robust growth in discretionary/out-of-home categories and staples and convenience foods remained resilient during the quarter.  Education and stationery products business bounced back with re-opening of educational institutions.

The company was able to mitigate the sharp escalation in input costs through multi-pronged interventions including strategic cost management, premiumisation, supply chain agility, judicious pricing actions, fiscal incentives, leveraging digital, optimising channel assortments and favourable business mix, it said.

Hotels business

Revenue from hotels business was up by 337 per cent at ₹555 crore (₹127 crore). The average room rate (ARR) and occupancy were ahead of pre-pandemic levels. Retail (packages), leisure, weddings and MICE segments have been the growth drivers, it said.

Higher RevPAR (revenue per available room) and structural interventions boost EBITDA margins to 32.5 per cent as against 17.5 per cent in Q1 FY20.

The company sustained the high growth trajectory in agri business with the segment revenue up by nearly 83 per cent at ₹7,473 crore (₹4,091 crore) driven by wheat, rice and leaf tobacco exports.

ITC leveraged strong customer relationships, robust sourcing network and agile execution. ITCMAARS was launched in seven states covering over 200 FPOs with over 75,000 farmer registrations till date.

Paperboards, paper and packaging segment grew 43 per cent at ₹2,267 crore (₹1,583 crore). There has been a strong demand across end-user segments. The company continues to scale up the sustainable products portfolio.

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