Home >Companies >Company Results >ITC registers a 9% jump in Q4 profit to 3,797.08 crore

ITC Ltd, India’s largest cigarette maker, said all its factories are currently operational and sales and distribution are returning to normalcy, after India lifted nearly all lockdown measures that had disrupted production and supplies of tobacco products.

The cigarettes and consumer goods maker on Friday reported a 9% rise in its fiscal-fourth quarter profit, beating analysts’ estimates. Net profit rose to 3,797.08 crore in the three months ended 31 March from 3,481.90 crore a year earlier, the company said in a filing to the stock exchanges on Friday evening. That compares with the 3,511.50 crore profit estimate in a Bloomberg survey of 14 analysts.

Revenue from operations, however, dropped 6.4% to 11,420.04 crore from a year earlier. Analysts had estimated net sales of 11,831.7 crore.

The lockdown hit the company’s hotels, education and stationery products business the most, the company said in a statement.

“Just as the business environment was showing signs of an incipient recovery in the beginning of the fourth quarter, the onset of covid-19 pandemic changed the situation dramatically. In the initial stages, the contagion had a significant impact on the hotels and education and stationery products businesses as it coincided with the peak period and the onset of the school season, respectively," it said.

ITC’s revenue at its FMCG business, which includes cigarettes and brands such as Aashirvaad atta, Bingo! Chips and Sunfeast biscuits, declined 5% during the March quarter to 8,314.08 crore. In the corresponding quarter a year ago, the FMCG business reported segment revenue of 8,759.84 crore.

Cigarettes revenue fell 6.47% to 5,130 crore during the quarter ended 31 March.

“Persistent weakness in the demand environment coupled with growth in illicit cigarette trade weighed on performance. Steep increase in taxes w.e.f. 1 February and disruptions in operations in March exacerbated the situation," it said.

Standalone revenues at the company’s hotel business fell 8.6% in the March quarter to 465.75 crore, while revenue at the company’s agri business declined 10% to 1,887.26 crore.

Within its FMCG business, ITC was quick to launch new products and build back its supplies especially as Indian consumers stuck at home helped propel demand for packaged noodles, cookies and other essentials.

“Business operations were severely impacted with the outbreak of covid-19 pandemic and the consequent nationwide lockdown. However, the company was able to successfully overcome these challenges and resume operations within a very short time frame. The categories in the essential consumer goods space, viz. staples, noodles, biscuits, dairy etc. witnessed robust demand, reflecting consumer preference for trusted brands; demand for discretionary categories was relatively soft."

The company was able to resume production for essential goods in a short time and mobilize existing capacity to launch new hygiene and home care products

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