ITC net profit up 14% to ₹3,697 crore

Our Bureau | | Updated on: Oct 27, 2021

Sanjiv Puri, Chairman, ITC | Photo Credit: SANJIB GHOSH

Diversified conglomerate ITC Ltd reported a 14 per cent rise in standalone net profit to ₹3,697 crore for the second quarter ended September 30. Net profit in the year-ago-period stood at ₹3,253 crore.

Revenue from operations in grew 12 per cent YoY to ₹13,554 crore – in line with Street expectations.

Sequentially, both revenues and PAT improved including across verticals, indicating an improvement in macro-economic scenarios. The most notable exception to this trend was the agri-business vertical that saw an over 30 per cent dip in revenues sequentially primarily due to segment volatilities and lack of opportunity trading.

ITC in a statement said, it witnessed “strong pick-up across all operating segments after severe disruptions in Q1” and sequentially revenues (ex-agri business) was up 12 per cent and EBITDA up 16 per cent.

In the agri-buisness, “the shortage in availability of shipping containers/port congestions and inclement weather towards the end of the quarter delayed customer call-offs,” it further added.

Cigarette & FMCG-Others

FMCG revenues – which include cigarette sales and others (foods, snacking, stationery and educational products, agarbattis , staple and others) – accounted for over 72 per cent of gross revenues of the company. Cigarette sales account for 42 per cent of gross revenues and

According to ITC, cigarette volumes witnessed smart recovery with exit volumes at near pre-Covid levels. Volume recovery was faster than the first wave of the pandemic.

The cigarette net segment revenue was up 10.3 per cent YoY while segment EBIT was up 10.4 per cent YoY.

“The company scaled up accessibility by augmenting the stockist network (2.1x y-o-y) and rural servicing infrastructure,” it said in the statement.

On the FMCG-others front, ITC said, the vertical grew over a high base quarter and witnessed “exceptional surge in sales”. Compared to pre-Covid quarters (Q2FY20), the revenues were up 23 per cent and the segment EBITDA at ₹403 crore was up 82 per cent over the pre-Covid comparable quarter of Q2FY20.

In the current quarter under review, the EBITDA margins sustained at 10 per cent, despite unprecedented commodity inflation”. The sharp escalation in input costs offset largely through focused cost management actions, premiumisation, judicious pricing actions, fiscal incentives and favourable business mix.

According to the company, there was “sharp rebound in Out-of-Home consumption on the back of improved mobility even as ‘at-home’ consumption moderated. Hygiene products witnessed marked demand volatility and moderated sequentially in line with lower intensity of the pandemic but remained significantly above pre-pandemic levels.

In Q2FY22, sales through the modern trade channels “grew strongly” while the e-commerce channel posted “robust growth” with specific strategies, new product introductions including e-Commerce first brands and customised supply chain solutions. Availability in rural markets were enhanced through scale-up of the stockist network.

Hotels segment

The hotel segment saw a “marked improvement in occupancy” leading to a faster recovery, ITC said. The segment revenue was back at Jan – Mar (Q4FY21) levels. Leisure destinations continued “to perform well” even as “business travel gathers momentum”.

Revenue growth driven through sharply targeted packages catering to emerging trends and consumer needs along with focused communication campaigns.

With conditions improving and travel picking up again, the company has launched two new brands – ‘Storii’ and ‘Mementos’ – to expand its footprint across the country through management contracts.

Published on October 27, 2021
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