ITC profit rises 33% to Rs 4,462.25 crore in Q1

ITC Ltd on Monday reported a 33.46 per cent rise in consolidated net profit to Rs 4,462.25 crore for the April-June quarter following a good performance by its business verticals.

The company had posted a net profit of Rs 3,343.44 crore during the April-June quarter of the previous fiscal, ITC said in a regulatory filing.

Its revenue from operations was up 39.25 per cent at Rs 19,831.27 crore during the quarter under review. It was Rs 14,240.76 crore in the corresponding period of the previous fiscal.

"Robust performance continues across segments," said an ITC earning statement.

ITC's total expenses were at Rs 14,201.51 crore, up 38.95 per cent in Q1/FY 2022-23, as against Rs 10,220.49 crore in the corresponding quarter.

Economic activity during the quarter gathered further momentum with an uptick in business and consumer sentiments, said the Kolkata-headquartered company.

"However, geopolitical tensions and persistent supply chain disruptions resulted in hardening of commodity prices, exacerbating the unprecedented inflationary conditions prevailing in the economy. Inflationary headwinds also manifested in subdued consumption expenditure with volumes coming under pressure, particularly in rural markets," said ITC.

During the quarter, revenue from the 'total FMCG' segment, which also includes cigarettes, was up 25.05 per cent to Rs 11,922.81 crore. It was Rs 9,534.07 crore in Q1/FY 2021-22.

Revenue from the cigarettes business was up 28.63 per cent to Rs 7,464.10 crore in the April-June quarter of this fiscal. It was Rs 5,802.67 crore in the corresponding quarter last fiscal.

This was helped by "stability in taxes on cigarettes, backed by deterrent actions by enforcement agencies," which enabled green shoots of volume recovery from illicit trade, said ITC.

Cigarettes Segment EBIT (pre-tax profit) was up 30.1 per cent y-o-y and it has reinforced its market standing in the segment, the earning statement added.

ITC's revenue from the FMCG-others segment was also up 19.49 per cent to Rs 4,458.71 crore in Q1/FY 2022-23 as against Rs 3,731.40 crore in the year-ago period.

This was led by a "robust growth in discretionary/Out-Of-Home categories" and its staples and convenience foods remained resilient.

ITC’s FMCG-others segment consists of branded packaged foods such as staples, snacks, meals, dairy and beverages, confections, apparel, education and stationery products, personal care products, safety matches and incense sticks.

"FMCG EBITDA margin sustained (-20 bps y-o-y) despite unprecedented inflationary headwinds," said ITC, adding it was even up 190 bps over Q1 of FY 2019-20.

ITC, which has brands including Aashirvaad, Sunfeast, Bingo, Fiama, Vivel and Classmate, said the escalation in input costs was mitigated through multi-pronged interventions as strategic cost management, premiumisation, supply chain agility, judicious pricing actions, fiscal incentives, leveraging digital, optimising channel assortments and favourable business mix.

Revenue from ITC's Hotels segment was up four-fold to Rs 580.71 crore in comparison to a lower base of the pandemic-impacted corresponding quarter. It was Rs 133.67 crore in Q1/FY 2021-22.

ITC Hotel's revenue was even up 41.4 per cent over the pre-pandemic Q1 of FY2019-20, the statement added.

In April-June quarter ARR (average room rent) and Occupancy was "ahead of pre-pandemic levels".

"Retail (packages), Leisure, Weddings & MICE segments (Meetings, Incentives, Conferences and Exhibitions) drive growth," said ITC.

Moreover, higher Revenue Per Available Room (RevPAR) and structural interventions boosted EBITDA margins to 32.5 per cent.

Its agribusiness was up 82.29 per cent to Rs 7,492.14 crore during the period under review, which was driven by wheat, rice and leaf tobacco exports. It was Rs 4,109.82 crore in the April-June quarter of the last fiscal.

ITC's revenue from 'Paperboards, paper and packaging' segment was at Rs 2,267.22 crore, up 43.25 per cent from Rs 1,582.65 crore earlier.

The segment has "strong demand across end-user segments" and its sustainable products portfolio continues to be scaled up, said ITC.

"Packaging and Printing Business witnessed robust growth in domestic and export segments across Cartons & Flexibles platforms," it said.

Revenue from other segments, which includes its Information technology services, branded residences etc, was up 8.17 per cent to Rs 735.84 crore as against Rs 680.26 crore of Q1/FY 2021-22.

Commenting on the outlook, ITC said: "While the trajectory of inflation remains a key monitorable, prospects of a favourable monsoon and the recent moderation in prices of key commodities along with proactive interventions by the Government and RBI augur well for sustained economic recovery and a pick-up in consumption expenditure".

Shares of ITC Ltd on Monday settled at Rs 307.55 on BSE, up 1.52 per cent from the previous close.