Moneycontrol
May 16, 2018 06:02 PM IST | Source: Moneycontrol.com

ITC Q4 net profit up 10% on year at Rs 2,933 crore; beats estimates

The company reported EBITDA margin of 39.1 percent compared to 38.4 percent a year ago

Moneycontrol News @moneycontrolcom

Cigarette-to-soap maker ITC reported 9.9 percent year-on-year (YoY) increase in net profit at Rs 2,933 crore for the fourth quarter of FY18.

On a comparable basis, gross sales value (net of rebates/discounts) stood at Rs. 67081.92 crore, representing a growth of 4.5 percent driven mainly by the branded packaged foods, personal care and the education and stationery products businesses offset by decline in agri business revenue.

Earnings before interest, tax, depreciation, and amortisation (EBITDA) grew 6.9 percent YoY to Rs 4,144 crore.

The company reported EBITDA margin of 39.1 percent compared to 38.4 percent a year ago.

A Reuters poll of analysts estimated net profit growth of 6.36 percent to Rs 2,839 crore.

EBIT of the main stay cigarette business of ITC was up 7.6 percent on year to Rs 3506 crore. In line with analysts expectations, cigarettes volume declined 2 percent in March quarter.

"While overall tobacco consumption in the country continues to grow, the share of duty paid cigarettes has come down substantially over the years and is estimated to account for around 11 percent of current tobacco consumption in the country," the company said in the statement.

Despite accounting for such a low share of overall tobacco consumption in the country, the legal cigarette industry contributes more than 87 percent of tax revenue from the tobacco sector.

The other types of tobacco products contribute barely 13 percent of tax revenue from the tobacco sector despite accounting for 89 percent of total tobacco consumption.

ITC is a diversified conglomerate also having a business interest in FMCG, paper, hotel, and agri.

ITC Hotel Business EBIT stood was up 13 percent on year in quarter at Rs 75.4 crore, while FMCG-other EBIT were up 64 percent at Rs 91.2 crore.

On hotel business, the company statement said, "In view of the long-term potential of the Indian hospitality sector, the company remains committed to enhancing the scale of the Business by adopting an 'asset-right' strategy that envisages building world-class tourism assets for the nation and growing the footprint of managed properties by leveraging its hotel management expertise. "

Gross Sales Value for the quarter ended March 2018 stood at Rs. 17933.48 crores. Gross Sale Value excluding Agri Business, grew by 5.7 percent driven by FMCG Others and Hotels.

Agri Business growth was impacted on account of a high base (imported wheat trading), limited trading opportunities in agri commodities such as wheat, soya, coffee and lower leaf exports during the quarter.

FMCG-others comparable revenue growth based on gross sales value stood at 10 percent during the quarter on a relatively firm base driven by Bingo snacks, Sunfeast biscuits, B Natural juices, Engage deos, Fiama & Vivel personal wash, SavIon handwash and Classmate notebooks.

The board has recommended a dividend of Rs 5.15 per share.

The board has also re-designated Sanjiv Puri, Chief Executive Officer & Wholetime Director, as the Managing Director of the Company with effect from May 16.

Today ITC stock ended 1.5 percent higher at 286.10 rupees on the National Stock Exchange.
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