 "ITC Q1 FY25 results: Net profit down marginally, revenue rises 7.5%")
Diversified conglomerate ITC on Thursday reported a marginal decline in net profit in Q1FY25, dragged by paper, paperboard and packaging, hospitality, and agri-businesses.
ITC clocked in a 0.26 per cent year-on-year (Y-o-Y) drop in the consolidated net profit in this period to Rs 5,091.59 crore from Rs 5,104.93 crore in the year-ago period.
The company reported consolidated gross revenue of Rs 20,029.60 crore for Q1FY25, up by 7.5 per cent compared to Rs 18,639.48 crore a year back.
The revenue net of excise at Rs 18,457 crore came in higher than the Bloomberg consensus estimate at Rs 17,892 crore. However, the net profit fell short of the Bloomberg estimate, which pegged it at Rs 5,451 crore.
Sequentially, the gross revenue was up three per cent, and the net profit was down 0.56 per cent.
Also Read
ITC said the performance was delivered in a challenging macro-economic and operating environment. Cigarettes and non-cigarettes fast-moving consumer goods (FMCG) segments delivered resilient performance amid subdued demand conditions, it said. There was also a high base effect in some of the operating segments.
The heavy-lifting cigarette segment recorded a 5.8 per cent Y-o-Y growth in revenue at Rs 8,842.22 crore in Q1FY25. Pre-tax profits from the segment touched Rs 5,255.06 crore in Q1FY25, a 6.29 per cent increase compared to the year-ago period.
The company noted that stability in taxes backed by deterrent actions by enforcement agencies enabled volume recovery for the legal cigarette industry from illicit trade.
The revenue from the non-cigarettes FMCG segment stood at Rs 5,498.80 crore, up by 6.3 per cent Y-o-Y. Pre-tax profit for the period under review was at Rs 479.17 crore, an increase of 10.4 per cent Y-o-Y.
The newly launched ITC Ratnadipa in Colombo weighed on the hospitality business at a consolidated level. The hotel segment clocked a 14.29 per cent Y-o-Y increase in revenue at Rs 713.3 crore during the period under review. However, the pre-tax profit at Rs 122.21 crore was down by 9 per cent Y-o-Y.
ITC said seven managed properties were operationalised during the quarter including Fortune Resort & Wellness Spa, Bhaktapur, Nepal. It is the first Fortune property outside India.
Regarding paper, paperboard, and packaging businesses, the company said green shoots of demand recovery emerged during the quarter. However, the performance remained impacted due to the cheap Chinese supplies in international markets including India, and a surge in domestic wood prices.
The segment recorded a 6.78 per cent Y-o-Y drop in revenue to Rs 1,976.85 crore in Q1FY25. Pre-tax profit was down 45.6 per cent to Rs 256.15 crore.
In agri-business, cost escalation in leaf tobacco and other agri commodities weighed on the margins during the quarter. The depreciation cost of the new nicotine and nicotine derivatives manufacturing facility also weighed on the margins. Pre-tax profit from the segment stood at Rs 344.60 crore, down by 2.2 per cent Y-o-Y.
The revenue from the segment at Rs 6,997.89 crore in Q1FY25 was up 22.19 per cent, driven by value-added agri products.