Conglomerate ITC on Monday reported a 16.29 per cent year-on-year (Y-o-Y) rise in consolidated net profit in the April to June quarter of 2023-24 (Q1FY24) to Rs 5,104. 93 crore, from Rs 4,389.76 crore, led by earnings from cigarettes, FMCG (non-cigarette), and hotels.
Consolidated revenue from operations in Q1FY24 at Rs 18,639.48 crore was lower by 6 per cent Y-o-Y, though it beat Bloomberg consensus estimate of Rs 17,811.8 crore. The estimate for net income adjusted was Rs 4,860.8 crore. Sequentially, revenues and net profit were down by 2.19 per cent and 1.36 per cent, respectively.
ITC stated that this performance was achieved amid a challenging operating environment and a high base effect in some of its operational segments. The company attributed its sustained growth momentum to factors, such as customer centricity, accelerated digital adoption, execution excellence, and agility.
The revenue generated by the cigarette segment reached Rs 8,355.66 crore in the June 2023 quarter, against Rs 7,464.10 crore a year ago
it clawed back volumes from illicit trade on the back of deterrent actions by enforcement agencies and relative stability in taxes.
Pre-tax profits from the cigarette segment reached Rs 4,944.02 crore, a rise from Rs 4,469.76 crore in the corresponding period a year ago.
In the non-cigarette FMCG segment, the revenue stood at Rs 5,172.71 crore in Q1FY24, compared to Rs 4,458.71 crore a year ago. Pre-tax profits rose to Rs 433.93 crore from Rs 206.87 crore in the same period last year, driven by expanding margins.
The company said that overall, input costs remained elevated compared to pre-pandemic levels, even as certain commodities witnessed price moderation on a high base of the previous year.
The improvement in profitability was driven by multiple interventions, the company said, including premiumisation, supply chain optimisation, judicious pricing actions, digital initiatives, strategic cost management, and fiscal incentives. ITC also said that the FMCG business witnessed ‘robust’ growth in both urban and rural markets.
The hospitality segment experienced its best Q1, driven by a strong average room rate (ARR). Revenue from this segment reached Rs 624.90 crore in the June quarter, against Rs 580.71 crore a year ago. Pre-tax profit rose to Rs 134.30 crore, surpassing Rs 116.31 crore in the year-ago period.
The agribusiness segment was affected by government-imposed restrictions on wheat and rice exports. Revenue from the segment was Rs 5,726.98 crore in Q1FY24, compared to Rs 7,492.14 crore a year ago. Still, pre-tax profit increased to Rs 352.37 crore from Rs 283.17 crore in the corresponding period last year.
Revenue from the paperboards, paper, and packaging segment amounted to Rs 2,120.76 crore in Q1FY24, a decline from Rs 2,267.22 crore a year ago. Pre-tax profit stood at Rs 471.26 crore, down from Rs 612.98 crore in the previous year. This was because of subdued demand conditions (domestic and exports), low-priced Chinese supplies in global markets, a sharp reduction in global pulp prices, and the high base effect.