Despite a challenging business landscape and a significant base effect in certain operational areas, ITC Limited managed to maintain its robust growth trajectory for the quarter. This was primarily attributed to its commitment to customer-centric strategies, rapid digital integration, exceptional execution, and agility.
The Gross Revenue reached INR 17,549 crore, demonstrating a 3.4 percent year-on-year growth (excluding Wheat & Rice exports, which saw an 8.9 percent increase). Meanwhile, the Profit Before Tax (PBT) surged to INR 6,514 crore, marking a noteworthy 9.7 percent year-on-year growth.
The Profit After Tax (PAT) experienced a substantial 10.3 percent year-on-year growth, reaching INR 4,927 crore. During the quarter, the Earnings Per Share stood at INR 3.96, compared to the previous year’s INR 3.61.
India continues to shine brightly, with robust tax collections, easing inflation, and an uptick in credit growth serving as some of the noteworthy positive signals within high-frequency indicators.
Even though public investment remains robust, consumer demand, particularly in the value segment and rural markets, has been relatively lackluster due to below-average monsoons and persistent food inflation, which experienced a sharp increase during the quarter.
Signs of recovery are emerging, as the potential for enhanced agricultural output, the arrival of the festive season, rising rural wages, and increased government investment in infrastructure bode well for a revival in rural markets.
In the near term, it will be crucial to closely monitor the pace of economic growth in China and other advanced economies, escalating geopolitical tensions, crude oil prices, consumer price inflation, particularly in the food sector, fluctuations in commodity prices, and agricultural output.
ITC said strong performance continues in FMCG – Others; segment revenue up 8.3 per cent YoY on a high base and a 2-year CAGR @ 14.5 per cent.
The segment EBITDA margin expanded 150 bps YoY to 11 per cent while the segment PBIT up 36.8 per cent YoY.
ITC posted resilient performance in cigarettes segment with net segment revenue up 8.5 per cent YoY and segment PBIT up 8 per cent YoY on a high base.
There was a sustained volume claw back from illicit trade on the back of deterrent actions by enforcement agencies and relative stability in taxes. Market standing reinforced through focused portfolio/market interventions & agile execution, ITC said.
ITC posted stellar performance in Hotels Business with record high second quarter performance; Segment Revenue and PBIT up 21 per cent and 50 per cent YoY, respectively, on a high base.
Segment EBITDA margin is up 170 bps YoY to 30.7 per cent driven by higher RevPAR, structural cost interventions & operating leverage.
ITC Hotels was honoured to have exclusively curated and served from the best of India’s culinary heritage at the prestigious G20 summit, Bharat Mandapam, New Delhi.
ITC Maurya also had the honour of hosting the President of the United States of America and the entire US delegation to the Summit.
The scheme of demerger approved by Board in August 2023 is progressing as per scheduled timelines.
A statement said that the Company continues to engage with farmers to build resilience in agrarian practices against extreme weather events; the Company’s Climate Smart Agriculture programme covers over 23 lakh acres and about 7.5 lakh farmers in the country.
Strong customer relationships and agile execution in Leaf Tobacco & Value Added Agri products continue to drive growth.
In line with its strategy to rapidly grow the salience of value-added products in the portfolio, the Business ramped up capacity utilisation of the recently commissioned value-added Spices processing facility in Guntur.
Further, the state-of-the-art facility (being set up by IIVL – a wholly owned subsidiary of the company) to manufacture and export Nicotine and Nicotine derivate products conforming to US/EU pharmacopoeia standards has been commissioned; exports are expected to commence over the next few months.
Performance in the paperboards, paper and packaging segment reflects the impact of low priced Chinese supplies and muted demand in export markets, sharp reduction in global pulp prices and high-base effect; domestic demand was also relatively subdued in certain discretionary categories.
Sharp drop in net sales realisation and global pulp prices witnessed during the quarter are likely to have bottomed out; green shoots of revival in demand were visible towards the end of the quarter, ITC said.
The project for augmentation of in-house chemical pulp capacity by approximately 20 per cent was completed during the quarter; this initiative will further enhance substitution of imported pulp and enable reduction in operating costs.
Structural advantages of the integrated business model, Industry 4.0 initiatives, strategic investments in pulp import substitution, High Pressure Recovery Boiler and proactive capacity augmentation in Value Added Paperboards aided in partly mitigating pressure on margins.