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ITC Q2 Result | Profit comes in at Rs 3,697 crore, revenue at Rs 13,553 crore

The quarter witnessed broad-based recovery in sales across markets and channels. Reduction in the intensity of the pandemic along with a pick-up in the pace of vaccination led to improvement in the demand environment and consumer sentiment during the quarter.

October 27, 2021 / 10:25 PM IST
 
 
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Cigarette-to hotels giant ITC Ltd. today declared its results for the 2nd quarter ending September 30, 2021. It has reported a standalone profit after tax of Rs. 3,697 crore for the quarter, increasing by 14% from Rs 3,253 crore reported in the same quarter last year and by 23% from Rs. 3,013 crore in June-21 quarter.

The standalone revenues came in higher at Rs 13,553 crore for the quarter, an increase of 12% compared to Rs 12,103 crore reported in September 2020 quarter and by 5% from Rs 12,959 crore reported in the previous quarter.

The company witnessed strong performance across businesses with the volumes in its main cigarette business reaching pre-COVID levels.

As per the company, “the quarter witnessed broad-based recovery in sales across markets and channels. Reduction in the intensity of the pandemic along with a pick-up in the pace of vaccination led to improvement in the demand environment and consumer sentiment during the quarter”.

However, operating environment was impacted by the unprecedented high inflation and disruptions in global supply chains and logistics.

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Business Performance

FMCG-Cigarettes business revenues grew by 10.3% on a y-o-y basis and its earnings before interest depreciation and tax (EBITDA) grew by 10.4%.

FMCG Cigarette business grew on the back of normalization of convenience store operations, launch of new products and widening of stockist network both in urban and rural areas.

FMCG-Others business delivered a resilient performance during the quarter, growing over 23% on an annualized basis over a high base quarter last year. On a sequential basis, FMCG-Others revenues grew 8%. Its EBITDA jumped 82% on a y-o-y basis to Rs 403 crore and by 35% sequentially. Even though the business was impacted by steep inflation, it was able to sustain its EBITDA margins at 10%.

This business rode on sharp rebound in demand with strong traction witnessed in “out-of-home” consumption with the ease of COVID restrictions even though there was a moderation in “at home” consumption. Staples and convenience foods as well as hygiene portfolio businesses were well above pre-pandemic levels. However, its stationery products continue to be impacted by the closure of educational institutions.

Hotels business was the biggest beneficiary of easing of COVID restrictions, as increased mobility resulted in much higher occupancy levels which were up by almost 3 times from the same period last year. This helped the business to be EBITDA positive in this quarter which saw a swing of +Rs134 crore over the 2nd quarter of last year.

The company launched two new brands in this business, ‘Storii by ITC’ and ‘Momentos by ITC’ with both having their own unique selling propostions (USPs).

2 new hotels were launched in the country under the brand ‘Welcome’.

Company’s leisure hotels performed well as business travel gathered momentum. Company was able to save fixed costs by good 31% over the same period last year.

Agri business revenues grew sharply on the back of increased export of wheat, rice and leaf tobacco. The business faced some challenges due to disruptions in logistics due to shortage of shipping containers and congestion at the ports but all supply commitments were met with all key customers.

e-Chaupal network was leveraged to provide support to the branded packaged foods business.

Paperboard, Paper and Packaging business revenues witnessed a growth of 25% on a y-o-y basis mainly due to revival in demand from end users. Publications, Quick Service Restaurants (QSR) and wedding card segments, however, remain relatively subdued. Increased demand for cartons helped Packaging and Printing Business to perform well.

The stock closed at Rs 238.45 on Wednesday, up Rs 1.75 (0.74%) from its previous close. It has generated returns of 42% in the last one year, 14% in this financial year, 14.3% in past 3 months and the stock has been flat in the past one month.

The company has interests in diversified businesses like FMCG, hotels, packaging, paper boards and specialty papers.
Moneycontrol News
first published: Oct 27, 2021 08:23 pm

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