Diversified entity ITC Ltd on Monday reported a 6.51% surge in its consolidated net profit for the December 2023 quarter, totaling INR 5,400.51 crore. This notable increase was driven by the resilient performance of the FMCG vertical. According to a regulatory filing by ITC, the company had recorded a consolidated net profit of INR 5,070.09 crore in the October-December period a year ago.
The gross revenue from sales increased by 2.3%, reaching INR 19,337.84 crore during the quarter under review. This marked a rise from INR 18,901.76 crore in the same quarter a year earlier.
In the December quarter, ITC’s revenue from operations reached INR 19,484.50 crore, reflecting a 2.43% increase from INR 19,020.65 crore recorded a year earlier.
“Amidst a challenging macro-economic and operating environment, as stated above, and high base effect in some of its operating segments, the company delivered a resilient performance during the quarter,” said ITC in an earning statement.
The total expenses of the Kolkata-headquartered firm rose by 5.33%, reaching INR 13,453.73 crore.
In the quarter, ITC’s revenue from the ‘total FMCG’ segment, encompassing the cigarettes business as well, increased by 4.47%, reaching INR 13,513.43 crore, compared to INR 12,934.67 crore in Q3 FY23.
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The revenue generated from the cigarette business experienced a modest increase of 2.59%, reaching INR 8,295.18 crore in the October-December quarter. In the same quarter of the previous fiscal year, it stood at INR 8,085.72 crore.
Its differentiated variants and premium segment continue to perform well during the quarter.
“The cigarettes business witnessed consolidation on a high base after a period of sustained growth momentum,” said ITC.
ITC’s revenue from the FMCG-others segment was also up 7.61 per cent at INR 5,218.25 crore in Q3 FY24 against INR 4,848.95 crore in the year-ago period.
“The FMCG Businesses delivered resilient performance amidst a slowdown in consumer demand; staples, dairy, beverages, fragrances, personal wash, homecare, agarbattis, classmate notebooks and pens drive growth,” it said.
Competitive intensity remained high in certain categories such as biscuits, snacks, noodles, and popular soaps, including from local and regional players.
ITC’s FMCG-others segment consists of branded packaged foods like staples, snacks, meals, dairy and beverages, confections, apparel, education and stationery products, personal care products, safety matches and incense sticks.
The revenue from ITC’s Hotels segment surged 18 per cent to INR 872.46 crore.
It witnessed strong growth in ARRs (average room rents) and occupancies across properties driven by (packages), MICE (Meetings, Incentives, Conferences and Exhibitions) segments and marquee events like the ICC Cricket World Cup, it added.
“Segment EBITDA margin expanded by 470 bps year-on-year to 36.2 per cent driven mainly by higher RevPAR (revenue per available room) operating leverage and strategic cost management initiatives,” it noted.
ITC’s agribusiness was marginally down to INR 3,273.23 crore in the December quarter of FY24 as it was impacted by restrictions on wheat and rice exports. It was INR 3,305.21 crore in the year-ago quarter.
“The operating environment remained challenging due to various policy interventions of the Government of India to ensure food security and control inflation which limited business opportunities for the agribusiness,” it said.
ITC’s revenue from the ‘paperboards, paper and packaging’ segment fell 9.74 per cent to INR 2,080.91 crore on account of a subdued consumer demand and a relatively muted festive season.
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The export markets in the segment remain impacted by low-priced Chinese supplies.
“Margins were impacted largely by a sharp drop in realisations and unprecedented surge in domestic wood costs due to increased demand from competing industries,” it said.
Revenue from other segments, including its information technology services, branded residences etc, rose 10.86 per cent to INR 950.04 crore against INR 856.91 crore in Q3 FY22.
Meanwhile, in a separate filing, ITC informed that its board in a meeting held on Monday declared an interim dividend of INR 6.25 per ordinary share of INR 1 each for the financial year ending on March 31, 2024.
The board also recommended the approval of the appointment of Atul Singh as a Non-Executive Director and Pushpa Subrahmanyam as an Independent Director, both for a period of five years with effect from April 2, 2024.
Shares of ITC on Monday settled at INR 450 apiece on the BSE, down 1.20 per cent from the previous close.
