ITC Q3 net up 16% to Rs 2,385 cr but margin disappoints

A big positive for the company was that its FMCG business outside of cigarettes has broken even operationally amid a general slowdown in the segment.

Other income surged 59 percent on yearly basis to Rs 391 crore during the quarter.

Earnings before interest, tax, depreciation and amortisation jumped 14.7 percent to Rs 3,181 crore and margin expanded 50 basis points to 36.9 percent in the December ended quarter as against analysts' forecast of 18.3 percent and 210 basis points growth, respectively.

Segmental Performance

Gross revenue from ITC cigarette business, which contributes to 40 percent to total revenues, grew 12.6 percent Y-o-Y to Rs 7,664 crore. Gross margin expanded 180 bps to 34.6 percent and net margin jumped 340 bps to 64.4 percent in the quarter gone by.

During the quarter, the company hiked prices of several brands in the cigarette business like Gold Flake King, Wills Navy Cut, Bristol etc.

FMCG (others) gross revenue (contributes 20 percent of total revenues), which  increased 16.4 percent to Rs 2,083 crore in the quarter gone by and hotel business revenues rose 27.7 percent to Rs 315.47 crore.

Agri business grew 0.8 percent to Rs 1,786.37 crore, and paper and packaging saw 6.6 percent growth at Rs 1,335.6 crore compared to a year ago period.

At 12:10 hours IST, the stock was trading at Rs 325.35, down 0.11 percent on the BSE.