ITC Q1 Results: Profit Rises 16%, Farm, Paperboard Businesses Drag Revenue
ITC's Q1 revenue fell 6% to Rs 18,639.5 crore against an estimate of Rs 16,657.5 crore.
ITC Ltd.'s first quarter consolidated net profit rose beating analysts' estimates due to growth in the cigarette, hotel, and fast-moving consumer goods businesses.
The profit of India’s largest cigarette maker increased 16% to Rs 5,104.9 crore in the quarter ended June, according to an exchange filing on Monday. That compares with the Rs 4,807.33 crore consensus estimate of analysts tracked by Bloomberg.
ITC Q1 FY24 Highlights (Consolidated, YoY)
Revenue down 6% to Rs 18,639.5 crore against an estimate of Rs 16,657.5 crore.
Ebitda up 10% to Rs 6,670.1 crore as compared with an estimate of Rs 6,204.3 crore.
Margin at 35.8% vs 30.6% and an estimate of 37.2%.
The quarterly revenue was dragged down by agricultural and paperboard businesses. Geopolitical tensions have led to concerns over food security and inflation globally. To ensure India remains food secure, the government has had to impose restrictions on wheat and rice exports, resulting in lower business opportunities for agri business this quarter.
In the April-June period, ITC's revenue from agri business fell 24% to Rs 5,727 crore. Excluding wheat exports, however, revenue from agri business grew 31% over the previous year, according to the company.
How Other Segments Fared (YoY)
Revenue from the FMCG business grew 16% to Rs 5,172.7 crore driven by staples, biscuits, noodles, beverages, dairy, agarbatti and premium soaps. It crossed the Rs 5,000-crore mark in a quarter for the first time.
FMCG segment margin expanded 325 basis points to 11%.
Cigarette business reported a 12% rise in revenue to Rs 8,355.6 crore.
Relative stability in cigarette taxes, backed by deterrent actions by enforcement agencies led to sustained volume recovery from illicit trade.
Hotel business revenue came in at Rs 624.9 crore, up 7.6%. This growth came on a high base of the previous year.
Hotel's Ebitda margin expanded by 140 basis points to 33.9%.
Growth was witnessed in average room rates across hotels, though occupancy moderated on a high base due to relatively fewer wedding dates during the quarter and pre-planned renovations.
ITC added six hotels to its sprawling portfolio including Welcomhotel Hamsa Manali and Storii Moira Riviera, a boutique resort in North Goa.
Paperboards, paper and packaging fell 6.46% to Rs 2,120.8 crore. Subdued demand in domestic and export markets, low-priced Chinese supplies and reduction in global pulp prices along with a high base effect weighed on performance.
"Consumer demand is witnessing incipient signs of recovery," the company said. However, risks from the external sector, consumer price inflation especially food, commodity price volatility, El Nino impact on monsoons and agri output will be key monitorables in the near term.
Shares of ITC closed 0.21% lower at Rs 447.8 apiece before the results were announced as against a flat benchmark NSE Nifty 50.
