Lower revenues from cigarettes and hotels dragged down diversified conglomerate ITC’s profit after tax (PAT) in the September quarter 18.23 per cent to Rs 3,413.44 crore.
In the June quarter, PAT was at Rs 2,562.73 crore. Revenues from operations at Rs 13,147.81 crore were higher by 2 per cent in the year ago period; in the June quarter, it was at Rs 10,478.46 crore.
The company said that the operating environment remained extremely challenging during the quarter with the unabated increase in daily Covid cases prompting several states to impose localized lockdowns.
“This impacted the recovery momentum, particularly in the months of July ’20 and August ’20 and posed significant challenges to sales operations. The situation continues to improve with progressive easing of restrictions from September ’20,” it added.
ITC, however, pointed to sequential recovery across all operating segments including cigarettes. Segment revenues in cigarettes during the quarter stood at Rs 5,627.67 crore compared to Rs 5,841.91 crore in the year ago period; revenues from hotels were at Rs 87.73 crore during the quarter.
Compared to the previous quarter, however, revenues from cigarettes and hotels were higher; cigarette revenues in the June quarter had stood at Rs 4330.05 crore and hotels at Rs 24.92 crore.
The hotels business was impacted by restrictions on travel and tourism. “While occupancy and revenue continue to improve month-on-month with leisure locations witnessing a marked uptick, they remain below last year levels,” the company said.
Losses from the hotels segment narrowed during the quarter to Rs 193.97 crore from Rs 257.39 crore in the previous quarter. In the year ago period however it posted a profit of Rs 17.01 crore.
Pre-tax profits from cigarettes – which accounts for the largest share of the company’s profits – were at Rs 3409.20 crore compared to Rs 4036.44 crore in the same period last year; in the previous quarter, it was at Rs 2535.24 crore.
The non-cigarette FMCG business, however, got a boost during the quarter with revenues at Rs 3930.63 crore compared to Rs 3296.22 crore. Pre-tax profit from the segment was at Rs 282.85 crore compared to Rs 92.04 crore year-on-year and Rs 129.06 crore quarter-on-quarter.
Segment EBITDA was up 66 per cent and EBITDA margins expanded 300bps to 9.7 per cent. Staples, convenience foods and health & hygiene products, representing 75 per cent of the portfolio (in base period excluding education and stationery products business) recorded a growth of 25 per cent.
ITC said that discretionary/’out of home’ categories posted strong sequential recovery to return nearly to pre-Covid levels (down 2 per cent year-on-year).
ITC’s paperboards, paper and packaging segment revenue was down by 6.8 per cent (year-on-year) to Rs 1,458.67 crore, but was up 42 per cent sequentially.
Agri business segment revenue saw a growth of 12.8 per cent driven by trading opportunities in rice, mustard, coffee and higher wheat supplies for Aashirvaad atta; the value added portfolio comprising spices for “food safe” markets, processed fruits, frozen snacks, posted a 25 per cent growth in revenue.