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ITC Q2 Results: Net profit up 10% to ₹4927 crore on strong cigarettes, hotels biz; FMCG revenue grows 8.3% YoY
ITC Q2 result: FMCG major reported a 10% YoY rise in its net standalone profit to ₹4927 crore in September quarter. Company's growth was fuelled by the strong performance of its cigrarettes and hotel business
ITC Q2 result: FMCG major reported a 10% YoY rise in its standalone net profit to ₹4927 crore in September quarter of FY24. The company's revenue from operations stood at ₹17705.08 crore against ₹17159.56 crore a year ago period.
ITC's September quarter growth was led by its cigarettes and hotel business segments. Moreover, the company reported strong performance in its FMCG segment with 8.3% YoY rise in segment revenue in Q2 FY24. Company shares closed 0.28% lower at ₹450.30 per share on BSE on Thursday.
Notably, this is the first quarterly earnings results of the company after the approval from the board of demerger of ITC hotels in August. The company board also recommended the appointment of Rahul Jain as Non-Executive Director of ITR for three years. He will take over the position from January 1, 2024.
As per the aggrement, ITC will hold an estimated stake of 40% in ITC Hotels and the balance shareholding of 60% (approx) will be held directly by shareholders of ITC proportionate to their shareholding in ITC. Currently, ITC has submitted the scheme to stock exchange for further procedure. Below are the key highlights of the company's September quarter result.
ITC FMCG segment revenue up 8.3% YoY
With improving macroeconomic conditions, ITC's FMCG segment continued to show strong performance. Its FMCG segment revenue stood at 8.3% YoY on a high base to ₹5,292 crores. FMCG segment earnings before interest tax debt amortisation increased 150 bps YoY to 11%.
FMCG sectors growth was fuelled by atta, spices, personal wash and incense sticks. Other than these products, company's stationary business consisting of classmate notebooks, pens, also flourished during the quarter under review.
Company's Agri business revenue increased by 26.4% YoY (excl. Wheat & Rice exports) driven by value added agri products & leaf tobacco.
Cigarette segment
To maintain the profitability of its cigarettes segment, ITC mitigated the sharp rise in the costs of leaf tobacco, increased taxes with improved mix, strategic cost management and calibrated pricing. Net segment revenue of cigarettes expanded by 8.5%. Its segment PBIT revenue increased by 8.0% YoY. The company continues to counter illicit trade and reinforce market standing by fortifying the product portfolio through innovation, democratising premiumisation across segments and enhancing product availability backed by superior on-ground execution, said the company.
ITC's hotel segment revenue increased by 21.2% YoY
ITC's hotel segment continued to showcase strong growth with rise in revenue by 21.2% YoY, on a high base (1.5x of Q2 FY20); Segment PBIT up 50% YoY. ITC's hotel also received exclusive distinction of curating and serving from the best of India’s culinary heritage at the prestigious G20 Summit, Bharat Mandapam, New Delhi. The company added three new properties to the Group portfolio including ‘WelcomHeritage Santa Roza, Kasauli’, ‘Fortune Park Hoshiarpur’ and ‘Fortune Ranjit Vihar, Amritsar’.
Poor performance in paper and packaging
ITC's subdued performance in the Paperboards, Paper & Packaging Segment was the result of low priced Chinese supplies and muted demand in export markets, sharp reduction in global pulp prices, and relatively subdued domestic demand and high base effect. In this segment, ITC's revenue declined by 9.5% YoY (2-yr CAGR +6.4%).
Segment margins were also affected by sharp drop in realisations and increased cost of inputs. However, company witnessed an impressive performance in its sustainable paperboards/packaging solutions portfolio. ITC Fibre Innovations Limited, is in the process of setting up a state-of-the-art premium Moulded Fibre Products manufacturing facility in Badiyakhedi, Madhya Pradesh.
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Business NewsCompaniesCompany ResultsITC Q2 Results: Net profit up 10% to ₹4927 crore on strong cigarettes, hotels biz; FMCG revenue grows 8.3% YoY
First Published:19 Oct 2023, 08:37 PM IST
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