Companies

ITC reports a near 12% fall in net profit to ₹3,663 crore

Our Bureau. Kolkata | Updated on February 11, 2021

The net profit in the year ago period stood at ₹4,142 crore

Diversified conglomerate, ITC Ltd, reported a near 12 per cent fall in net profit to ₹3,663 crore for the period ending December 31, 2020. The net profit in the year ago period stood at ₹4,142 crore.

During the quarter under review, it reported a turnover (revenue from operations) growth of 5 per cent, YoY, to ₹12,580 crore. Revenue from operations in the corresponding quarter last fiscal stood at ₹12,013 crore.

According to a company statement, the decline in profit after tax is a result of adjusting for one-time benefit of ₹340 crore in base period due to reduction of corporate tax rate.

“Strong sequential recovery momentum continues across segments including cigarettes. Gross revenue up 5 per cent sequentially (QoQ) and over last year (YoY); profit before tax (PBT) up 13 per cent QoQ,” ITC said in a statement.

The Board of Directors of the company has declared an Interim Dividend of ₹5 per ordinary share of ₹1, each. The record date fixed for the interim dividend is February 23.

FMCG - Others

The FMCG-Others Segment, ITC said, sustained “double-digit revenue growth despite demand moderation in certain categories”. The segment now accounts for nearly 29 per cent of its gross revenues and over 4 per cent PBT.

For the period under review, the segment saw revenues increase by nearly 8 per cent, YoY, to ₹3,562 crore. Staples, convenience foods and health & hygiene products record growth of 11 per cent; while the discretionary/out-of-home categories post smart recovery to grow by 11 per cent, the company said in a release. ‘Savlon’ clocked ₹1,000 crore consumer spend (for year-to-date December 2020).

E-commerce channel sales continued to double and now accounts for 5 per cent of segment revenue.

“The modern trade channel staged a strong recovery after a soft H1. Sales in rural markets remained strong while urban markets witnessed progressive improvement aided by increased mobility and easing of restrictions,” it said.

Cigarette business

The cigarette business saw strong sequential recovery in volume and revenues led by metros and large town markets on the back of easing of restrictions and enhanced mobility.

On a Y-o-Y basis, the cigarette revenue witnessed a 4 per cent rise to ₹5,498 crore (for Q3FY21); while segment profit saw an 8 per cent decline to ₹3,453 crore.

Cigarette sales accounted for 44 per cent of gross revenues; and over 70 per cent of the profit before tax.

The company said, “A 13 per cent tax hike with effect from February 1, 2020 continues to weigh on legal industry volumes.”

Other businesses

The hotels business witnessed recovery with improvement in room and food and beverages business. It turned EBITDA positive in December 2020 and break-even for the quarter. Segment revenue for Q3FY21 stood at ₹235 crore.

Weddings, staycations / motorable getaways were the key drivers besides healthcare and quarantine-related business.

“Leisure destinations turned in a strong performance reflecting the continuing trend of short getaways with hill stations, Rajasthan and Goa leading the charts,” the company statement said.

Revenue per available room (RevPar) although it has seen an improvement across business locations remains below pre-Covid levels.

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Published on February 11, 2021
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