ITC beats estimates, posts 11% profit growth in Q3 FY24

Bengaluru: Beating Dalal Street estimates, cigarettes-to-hotels conglomerate ITC Ltd on Monday posted better-than-expected profit for the October-December quarter of financial year 2023-24, driven by sustained volume growth and notable performance of differentiated and premium offerings.

The net profit for the third quarter grew 10.8 per cent year-on-year at Rs 5,572 crore, against Rs 5,031 crore in the corresponding period of 2022. Meanwhile, revenue from operations stood at Rs 17,651 crore, registering an underwhelming 2 per centrise over Rs 17,265 crore clocked in the same period the year before.

“Growth in both traditional and emerging channels (viz modern trade, e-commerce, quick commerce) continued to be driven by sharp execution of channel-specific business plans, collaborations, format-based assortments and category-specific sell-out strategies,” the company said in a press statement, adding that competitive intensity remained high in categories such as biscuits, snacks, noodles and popular soaps.

While the cigarette business, which accounts for over 40 per cent of the company’s total topline, saw a 2.6 per cent annual growth, other products in the fast moving consumer goods segment pitched in to register an overall 5 per cent annual growth at Rs 12,757 crore during the December quarter.

Gaurang Shah, senior vice president at Geojit Financial services, cited erratic monsoon for the lower-than-expected topline growth during the quarter. He however remains optimistic about the long term prospects of the company.

The hotels segment, which is set to demerge into a separate entity, saw its best ever quarter driven by higher revenue per available room, structural cost interventions and operating leverage. The overall revenue from hotels, agri business and paperboards, paper and packaging categories grew 2.5 per cent year-on-year to Rs 18,735 crore.

Meanwhile, total expenses surged 5.2 per cent to 12,056 crore during the third quarter in 2023, from Rs 11,459 in 2022.

The number 2 FMCG player’s board also declared an interim dividend of Rs 6.25 per ordinary share of Re 1 for the financial year. The dividend will be paid to eligible shareholders between February 26-28, 2024, the company said in a regulatory filing.