All-round growth . ITC posts 21% growth in Q2 net at ₹4,466 crore

Backed by an all-round growth across businesses, diversified conglomerate ITC Ltd posted 21 per cent growth in standalone net profit at ₹4,466 crore for the quarter ended September 30, 2022, beating street estimates. The net profit was at ₹3,697 crore for the same period last year.

Gross revenue on a standalone basis grew by 27 per cent at ₹16,971 crore during the quarter under review, as compared with ₹13,556 crore in the same period last year. Sequentially, profit grew by seven per cent from ₹4,169 crore during the first quarter ended June 30, 2022.    

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Revenues from total FMCG business, which includes cigarettes and non-cigarettes FMCG businesses, grew by 22 per cent at ₹11,838 crore (₹9,678 crore) during the quarter under review. The non-cigarette FMCG business posted 21 per cent growth at ₹4,885 crore (₹4,036 crore).

“Robust performance in FMCG-other segment revenue up 21 per cent y-o-y, at approximately 1.5X of Q2-FY20. Staples and convenience foods and discretionary/out of home categories drive growth. Education and stationery products business continues to witness strong traction. Segment EBITDA margin at 9.5 per cent (-50 bps y-o-y; +170 bps sequentially) – severe inflationary impact mitigated through multi-pronged interventions,” the company said in a press statement.

Cigarette business

The cigarettes business registered 23 per cent growth at ₹6,954 crore (₹5,642 crore). Stability in taxes on cigarettes, backed by deterrent actions by enforcement agencies, enable continued volume recovery from illicit trade. Market standing continues to be reinforced through focused portfolio/market interventions and agile execution, the release said.

Hotels business

The hotels business registered 82 per cent jump in revenues at ₹536 crore (₹295 crore). ARR and occupancy is ahead of pre-pandemic levels. Segment EBITDA margin at 29 per cent  (vs 20.4 per cent in Q2-FY20) driven by higher RevPAR and structural cost interventions, it said.

Agri business grew by 44 per cent at ₹3,997 crore (₹2,776 crore). “Leveraged strong customer relationships, robust sourcing network and agile execution. ITCMAARS being scaled up with over 460 FPOs in 9 states with about 180,000 farmer registrations till date,” it said.

Paperboards and packaging grew by 25 per cent at ₹2,288 crore (₹1,830 crore).

Inflationary headwinds

Economic activity continued to gather momentum during the quarter along with improvement in business and consumer sentiments. However, input prices remained elevated even as some commodities witnessed softening in course of the quarter. Inflationary headwinds continued to weigh on consumption expenditure which was partly offset by early onset of festive season this year in some parts of the country.

“Amidst such a challenging operating environment, the company’s focus on accelerated digital adoption, customer centricity, execution excellence and agility enabled it to continue to deliver strong growth across operating segments during the quarter, both sequentially and on y-o-ybasis,” it said.

The company’s scrip closed at ₹349.70, up by 0.97 per cent on the BSE on Thursday.  

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