ITC Q3 net profit zooms 21% to Rs 5,031 crore, beats estimates

ITC has also declared an interim dividend of Rs 6 per share for the financial year ending on March 31, 2023.

Cigarette-to-soap maker ITC's standalone net profit zoomed 21 percent year-on-year (YoY) to Rs 5,031 crore. It stood at Rs 4,156 crore in Q3FY22.

The profit beat estimates by a significant margin. According to an average of estimates of brokerages polled by Moneycontrol, the company's bottom line was expected to come in at Rs 4,614 crore.

Standalone revenue from operations (excluding excise duty) grew 2.3 percent YoY to Rs 16,225.7 crore against Rs 15,862 crore in the year-ago period. EBITDA (earnings before interest, taxes, depreciation and amortization) grew 22 percent YoY at Rs 6,223.2 crore and EBITDA margins improved over 600 basis points to 38.4 percent.

One basis point is one-hundredth of a percentage point.

Along with the Q3 numbers, the company has also declared an interim dividend of Rs 6 per share for the financial year ending on March 31, 2023.

Coming to segment-wise performance, cigarettes revenue grew 16.7 percent YoY to Rs 7288 crore. FMCG revenue grew by 18 percent to Rs 4841 crore.

Hotels business revenue jumped 50 percent to Rs 712 crore as travel rebounded. The segment's operating margin came in at 31.5 percent versus 24.7 percent in the year-ago period, driven by higher RevPAR, operating leverage and structural cost interventions.

RevPAR represents the revenue generated per available room. It is now ahead of pre-pandemic levels on the back of retail (packages), leisure and weddings, as per the company.

Meanwhile, agri revenue fell 37 percent YoY to Rs 3123 crore, due to impact of restrictions imposed on wheat and rice exports by the government during the year. Paperboard and paper revenue grew by 12.7 percent YoY to Rs 2305 crore.

"Stability in taxes on cigarettes, backed by deterrent actions by enforcement agencies, enable continued volume recovery from illicit trade," said the company in its earnings press release. Analysts see cigarette volume growth at 14 percent YoY while Street expectation was of 10 percent.

The FMCG businesses witnessed strong growth across channels and markets (both urban and rural) driven by ramp-up in outlet coverage, enhanced penetration and superior last mile execution, as per the media release. Margin for the segment improved 90 basis points YoY to 10 percent for the quarter.