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ITC Q2 Results: Net profit rises 3% to ₹5,078 crore, revenue up 17% YoY; 5 key highlights
- ITC Q2 Results: The tobacco-to-hotels conglomerate's revenue from operations in the second quarter of the current fiscal rose 17 per cent to ₹19,327.8 crore
ITC Q2 Results: ITC Ltd announced its July-September quarter results for fiscal 2024-25 (Q2FY25) on Thursday, October 24, reporting a rise of three per cent in net profit to ₹5,078.3 crore, compared to ₹4,927 crore in the corresponding period last year. The tobacco-to-hotels conglomerate's revenue from operations in the second quarter of the current fiscal rose 17 per cent to ₹19,327.8 crore, compared to ₹16,550 crore in the year-ago period.
ITC witnessed "subdued demand conditions, unusually heavy rains in parts of the country, high food inflation and sharp escalation in certain input costs (like leaf and wood)" during the quarter. "Amid a challenging operating environment, the company delivered a "resilient performance" during the quarter, and its gross revenue had strong growth, “driven by Agri-Business and Hotels,” said ITC in a regulatory filing to the stock exchanges.
Here are 5 key highlights of ITC Q2 Scorecard
1.P&L Account: Expenses, EBITDA
ITC's total expenses were 21 per cent higher in the September quarter, to ₹16,056.86 crore. The total income, which includes other income, rose 14.86 per cent to ₹22,897.85 crore. It was ₹19,934.9 crore a year ago. ITC was hit by higher raw materials costs, heavy rains, and a broader slowdown in consumer goods demand.
On the operating front, the Gold Flake cigarettes maker's earnings before interest, taxes, depreciation, and amortization (EBITDA) during the September quarter rose five per cent to ₹6,335 crore, compared to ₹6,041 crore in the year-ago period. Margin dropped by 370 basis points (bps) to 32.8 per cent compared to 36.5 per cent in the same period last year.
2.FMCG, cigarette biz
During the quarter, ITC revenue from the 'total FMCG' segment, including the cigarettes business, grew 6.1 per cent to ₹14,463.15 crore. It was ₹13,631.46 crore in the corresponding September quarter. "FMCG business demonstrated resilience amidst muted demand conditions, led by agile innovation and a slew of innovative product launches," said ITC.
Revenue from the cigarette business increased 6.6 per cent to ₹8,877.86 crore in the July-September quarter of this fiscal. It was ₹8,328.21 crore in the corresponding quarter of the last fiscal. ITC's market standing continues to be reinforced in the cigarette business through strategic portfolio and market interventions focusing on competitive regions and counter illicit trade.
ITC's revenue from the FMCG-others segment rose 5.31 per cent to ₹5,585.29 crore in Q2 FY25. Staples, biscuits, snacks, frozen snacks, dairy, premium soaps, homecare and agarbatti drove the growth in the segment. However, "notebooks impacted by high base effect and opportunistic play by local brands, led by a sharp drop in paper prices," said ITC.
The segment witnessed a margin drop of 35 bps amid inflationary headwinds in input costs. ITC's FMCG-others segment consists of branded packaged foods like staples, snacks, meals, dairy and beverages, confections, apparel, education and stationery products, personal care products, safety matches, and incense sticks.
3.Hotel, agri, and other biz
Revenue from ITC's Hotels segment surged 17 per cent to ₹789.16 crore. The growth was driven by the F&B, retail, and wedding segments. "The Hotels Segment delivered a strong performance on a high base (LY includes G20-related business)," ITC said, adding that the Hotel business's EBITDA expanded 70 bps YoY driven by higher RevPAR (revenue per available room), operating leverage, and strategic cost management."
Launched in 1975, ITC's hotel segment has over 140 luxury properties across 90-plus locations. The conglomerate operates with six brands - ITC Hotels, Mementos, Welcomhotel, Storii, Fortune and WelcomHeritage.
The agribusiness zoomed 46.57 per cent to ₹5,845.25 crore in the September quarter of FY25, led by leaf tobacco and value-added agri products. It has "strong growth in leaf tobacco exports, leveraging strong customer relationships and new business development," and a value-added agri portfolio like coffee, fruits and vegetables, and spices also performed well.
Also Read: ₹7.50/Share: FMCG giant ITC declares final dividend for FY24 with Q4 results; Record date fixed
ITC's revenue from 'paperboards, paper and packaging' segment increased 2.14 per cent to ₹2,114.18 crore. “It remains impacted due to low-priced Chinese supplies in global markets, including India, soft domestic demand conditions and unprecedented surge in wood prices”, said ITC.
"Subdued realisation, the surge in domestic wood prices and ocean freight continue to weigh on margins. Unseasonal rains adversely impact wood availability, quality and procurement price," said ITC. Revenue from other segments—including information technology services and branded residences—rose 10.03 per cent to ₹1,004.27 crore, up from ₹912.71 crore in Q2 FY24.
4.Shareholding in Oberoi, Leela chains
ITC, which is demerging its hotel business, said that its board had approved the consolidation of its shareholding in rival hospitality chains Oberoi and Leela by acquiring shares from a wholly owned arm, Russell Credit Ltd.
ITC said in a regulatory filing that the board approved the acquisition of 1.52 crore equity shares of ₹2 each of EIH Ltd (EIH) and 34.60 lakh equity shares of ₹2 each of HLV Ltd (HLV) from Russell Credit Ltd (RCL), a wholly-owned subsidiary of the company, at their respective book value.
EIH Ltd owns and operates hospitality properties under brands, including Oberoi and Trident, while HLV Ltd operates a chain of luxury properties under the Leela brand. ITC added that steps had been taken to consolidate EIH and HLV's shareholdings under the company.
After such an acquisition, “the total shareholding of ITC in EIH and HLV would be 16.13 per cent and 8.11 per cent, respectively.” ITC currently holds 13.69 per cent in EIH, while RCL holds a 2.44 per cent stake.
ITC holds a 7.58 per cent stake in HLV Ltd. The company further said its board approved the "acquisition from RCL of the entire share capital of Greenacre Holdings Ltd, an unlisted company and a wholly owned subsidiary of RCL, at book value." The acquisitions will be subject to relevant approvals from the RCL Board of Directors.
ITC is demerging its hotel business into a separate entity. In June, ITC shareholders, with a majority of 99.59 per cent votes, approved the demerger of ITC Hotels into a separate entity. A new wholly-owned subsidiary, ITC Hotels Ltd, will handle its hotel and hospitality business.
5.Management Update
ITC informed that its board has recommended the approval of Siddhartha Mohanty's appointment as a Non-Executive Director of the company for three years with effect from January 1, 2025. He will represent the Life Insurance Corporation of India. Ahead of the announcement of Q2FY25 results, shares of ITC settled 1.81 per cent lower at ₹471.85 apiece on the BSE.
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Business NewsCompaniesCompany ResultsITC Q2 Results: Net profit rises 3% to ₹5,078 crore, revenue up 17% YoY; 5 key highlights
First Published:24 Oct 2024, 07:33 PM IST
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