ITC Ltd on August 1 said its standalone net profit rose marginally in June quarter to Rs 4,917 crore from Rs 4,903 crore in the corresponding quarter previous year, missing Street expectations.
A Moneycontrol poll of 7 brokerage estimates pegged ITC’s fiscal first quarter net profit at Rs 5,137 crore and revenue at Rs 17,171 crore.
The conglomerate's revenue from operations rose 7 percent to Rs 18,220 crore in Q1FY25 as against Rs 16,995 crore in Q1FY24.
The company in a statement said, "While private consumption expenditure remains relatively subdued, the Indian economy continues to be extremely resilient amidst a global growth slowdown on the back of multi-dimensional and purposeful policy interventions by the government, with sustained public expenditure in creating physical, digital, agri
and rural infrastructure."
The FMCG EBITDA margin grew 11.3 percent by 25 bps YoY and saw a sequential price uptick in certain commodities. As per the company, amidst muted demand, the FMCG businesses saw revenue growing 6.3 percent YoY to Rs 5,491 crore.
"Commodity prices largely stable during the quarter compared to the
base period; certain items such as sugar, potato, choco cream and
edible oil witnessed sequential uptick in prices," ITC said in a stock exchange filing.
Staples, snacks, dairy, personal wash, fragrances, homecare and agarbatti were growth drivers. However, "extreme heatwave adversely impacted categories with higher salience of discretionary/out-of home consumption", the company statement said.
The cigarettes segment saw net revenue increase of 7 percent at Rs 7918 crore and PBIT rose to 6.5 percent YoY. "Sharp escalation in costs of leaf tobacco and certain other inputs were largely mitigated through improved mix, strategic cost management and calibrated pricing," the company stated.
This cost escalation in leaf tobacco and other agri-commodities weighed on margins during the quarter.
In the Budget 2024there was no increase in tobacco tax, the company in its Q1 results stated, "Relative stability in taxes, backed by deterrent actions by enforcement agencies, enables continued volume recovery from illicit trade."
The hotel business, ITC reported revenue of Rs 666 crore a growth of 10.9 percent YoY; and PBIT is up 11.5 percent YoY. ITC Ratnadipa, Colombo launched in April 2024, is currently operational with 225 rooms and 8 F&B outlets. The company plans 28 managed Hotels in the next 24 months till June 2026.
The chairman and managing director of the company Sanjiv Puri previously shared that the demerger of the hotel business will take another six months. In the Q1 results press release the company updated that shareholders approved the scheme of arrangement for demerger at the NCLT convened meeting held on June 6, 2024. Petition for sanction of the scheme has been filed with NCLT on July 22, 2024.
In Q1, seven managed hotels with around 460 keys were operationalised.
Agri-Business witnessed a Rs 6,973 crore revenue increase of 22.2 percent driven by value-added agri products, leaf tobacco and wheat.
"Geopolitical volatility and climate emergencies have led to concerns over food security and food inflation globally. To ensure India remains food secure, Government has had to impose trade restrictions on agri commodities; consequently limiting business opportunities in the bulk commodities space," as per the release.
The paperboards, paper & packaging witnessed a decline in revenue by 6.8 percent y-o-y at Rs 1977 cr due to the impact of low-priced Chinese supplies in global markets including India, muted domestic demand, and unprecedented increase in domestic wood costs.
On August 1, ITC's shares on NSE closed trading 0.46 percent lower at Rs 493.05 apiece.
ITC's margin was at 37 percent in Q1FY25 as compared to 39.5 percent in Q1FY24.
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