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ITC Q2 profit rises 24% to 4,620 cr, beats estimates as cigarette and snacks sales rise

ITC reported its July-September quarter earnings on 20 October, 2022.Premium
ITC reported its July-September quarter earnings on 20 October, 2022.

  • ITC Q2 results: Segment wise, revenue from cigarette business was up 23.3%. Stability in taxes on cigarettes, backed by deterrent actions by enforcement agencies, continues to enable volume recovery for the legal cigarette industry from illicit trade, the company said

Cigarette-to-hotel conglomerate ITC on Thursday reported a 24% growth in its consolidated net profit at 4619.77 crore (attributable to owners of the parent) for the quarter ended 30 September, 2022 (Q2FY23), driven by demand for its cigarettes and snacks. It was 3,713.76 crore in the year-ago period.

On a sequential basis, the FMCG major's consolidated profit after tax (PAT) has risen 5% from 4389.76 crore in the June quarter (Q1FY23).

The Kolkata-based company's revenue from operations rose 25% to 18,608 crore in the July-September quarter from 14,844 crore in the same quarter last year.

Segment wise, revenue from cigarette was up 23.3% YoY. “Stability in taxes on cigarettes, backed by deterrent actions by enforcement agencies, enable continued volume recovery from illicit trade," the company said.

The maker of Classic cigarettes, Sunfeast biscuits and Bingo chips reported a strong growth in Agri Business external revenue driven mainly by wheat, rice and leaf tobacco exports.

Total expenses during the quarter stood at 12,824 crore, up 25% over 10,258 crore of the corresponding period last year.

Meanwhile, revenue from the hotels business inched up 81.9% YoY, signalling a strong comeback from the impact of coronavirus-related curbs on travelling. 

ARR and Occupancy ahead of pre-pandemic levels driven by Retail (packages), Leisure, Weddings and MICE segments, the company said.

The recent easing in raw material costs could further boost earnings of diversified consumer companies such as ITC, which suffered from inflationary pressures and supply chain disruptions due to the Russia-Ukraine war and lingering impact of Covid-19.

"Inflationary headwinds continued to weigh on consumption expenditure, which was partly offset by early onset of festive season this year in some parts of the country," the company stated.

ITC reappoints Nakul Anand as Wholetime Director

The company has also re-appointed Nakul Anand as a Director and also as a Wholetime Director for a period of one year with effect from 3 January, 2023.

“We write to advise that the Board at the aforesaid meeting recommended for the approval of the Members, re-appointment of Mr Nakul Anand as a Director and also as a Wholetime Director of the Company for a period of one year with effect from 3rd January, 2023," the company said in a BSE filing.

What analysts estimated

Meanwhile, HDFC Securities had expected the FMCG major to report adjusted profit of 4,190 crore, up 13.3% YoY.

Motilal Oswal Securities expected cigarette volume growth at 13%. It projected profit rising 14.1% to 4,220 crore.

Elara Securities said ITC profit will come at 4,180 crore, up 13.1% YoY.

ITC as a stock has delivered a solid 59% return so far this year, which is the third highest among Nifty50 constituents. Adani Enterprises (up 91.80%) and Coal India (up 63%) are the only two index stocks delivering better returns than ITC this year.

Shares of ITC were quoting higher for the fifth straight trading day, surging 5.68% to close at 350.60 apiece in the NSE ahead of its Q2 results.

ABOUT THE AUTHOR

Meghna Sen

Meghna Sen is a deputy chief content producer at Livemint where she tracks companies, markets, news. She has 5+ years of experience with online and print publications. Email: meghna.sen@htdigital.in
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