ITC Q2 PAT up 14% YoY to Rs 3,697 crore

ITC reported 13.7% rise in standalone net profit to Rs 3,697 crore on a 11.2% increase in net revenue to Rs 12,543 crore in Q2 FY22 as compared with Q2 FY21.

EBITDA improved by 12.9% to Rs 4,615 crore in Q2 FY22 from Rs 4,088 crore in Q2 FY21.

Profit before tax in the second quarter stood at Rs 4,880 crore, up by 13.5% from Rs 4,301 crore reported in the same period last year.

Total FMCG segment revenue increased by 7% YoY to Rs 9,678 crore during the period under review. In the FMCG segment, cigarettes revenue rose by 10.2% YoY to Rs 5,642 crore while the revenue from other FMCG segment improved by 2.9% YoY to Rs 4,036 crore during the quarter.

Hotel business revenue stood at Rs 295 crore (up 2.6x YoY), agri-business revenue was at Rs 2,776 crore (down 7% YoY) and paperboards, paper & packaging revenues were at Rs 1,830 crore (up 25.4% YoY) in the second quarter of FY22.

ITC said that the quarter witnessed broad-based recovery in sales across markets and channels. However, unprecedented inflation in key input costs coupled with significant disruptions in global supply chains and logistics weighed on the operating environment.

With respect to the cigarettes business, the company said that cigarette volumes witnessed smart recovery with exit volumes at near pre-COVID levels, after segment witnessed significant disruptions in Q1, Broad-based recovery witnessed across markets during the quarter; however, certain markets in Kerala and East remain relatively subdued.

The company's FMCG - Others segment delivered resilient performance, growing on a high base quarter which witnessed exceptional surge in sales. The company witnessed sharp rebound in 'Out-of-Home' consumption on the back of improved mobility even as 'at-home' consumption moderates. However, the closure of educational institutions continues to impact the Education & Stationery Products business.

In the Hotel segment, marked improvement in occupancy (3x of Q2 LY) drover faster recovery in Hotels business. The company said that leisure destinations continue to perform well while Business travel gathers momentum. Structural cost management actions undertaken in the past year aided in reduction of controllable cash fixed costs by 31% over Q2 FY20, ITC said.

The company recorded strong growth in Agri Business external revenue, which was driven mainly by wheat, rice and leaf tobacco exports. The company ensured zero disruptions in supplies to key customers despite significant operational challenges; however, shortage in availability of shipping containers/port congestions and inclement weather delay call-offs.

In the Paperboards, Paper and Packaging Segment, Paperboards volumes were at record high and the business delivered robust performance aided by revival of demand across most end-user segments.

ITC is engaged in the marketing of fast-moving consumer goods (FMGC). The firm operates through four segments: FMCG; hotels; paperboards, paper and packaging, and agri business. ITC is the market leader in cigarettes in India. The company also has presence in branded packaged foods, personal care, education and stationery, agarbattis & safety matches, lifestyle retailing, hotels, paperboards & specialty papers, packaging, agri-business & IT.

The scrip fell 2.06% to currently trade at Rs 233.50 on the BSE.

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