ITC Q4 net profit up 6%, revenue grows 9%; cigarette biz steady

Its cigarette revenue in Q4 jumped 10.2 percent at Rs 4639 crore from Rs 4211 crore while EBIT also increased 11.5 percent at Rs 3019 crore against Rs 2706 crore (YoY). Cigarette EBIT margin was at 65.1 percent compared to 64.3 percent (YoY) while hotels revenue grew 4.8 percent at Rs 363 crore versus Rs 346.4 crore (YoY). ITC said that hotel business was aided by healthy growth in occupancy and food & beverage revenue. "Segment results include impact of gestation costs of ITC Grand Bharat and business disruption caused by heavy rains in Chennai during November/December 2015," it added. The company has said that FMCG-cigarettes segment continues to be impacted by severe pressure on legal cigarette industry volumes even as illegal trade grows unabated.

In total gross margins jumped 30 basis points at 60.9 percent compared to 60.6 percent (YoY). Raw materials costs increased 8.2 percent at Rs 3034 crore.

FMCG business saw tepid revenue growth even as competition in intensified as sluggish demand and price deflation further weighed on growth. "FMCG-others segment registers revenue growth of 7.7 percent amidst sluggish demand conditions and price deflationary environment. Most categories record improvement in market standing. Segment Results improve further despite start-up cost of new categories (Juices, Dairy, Health & Hygiene segment in Personal Wash) and sustained investment in brand building," it said in a statement. Agri-business revenue jumped 26.5 percent with a scale up in operations but growth was partially mitigated by lack of trading opportunities in wheat, coffee and soya. The company has said that agri-business segment revenue was impacted by lack of trading opportunities in wheat, coffee & soya due to higher crop output and steeper currency depreciation in competing origins. "Significant scale up in sourcing of wheat for ‘Aashirvaad’ atta. Profitability improvement driven by superior product mix and higher realisations," a company statement said.

Paperboards revenue in Q4 was 3 percent and hotel revenue grew 10.4 percent year-on-year. The personal care products business delivered a resilient performance during the year which was marked by tepid volume growth and price deflation. Most players in the industry passed on the benefit of a decline in input costs, especially of palm oil, to consumers and implemented aggressive product promotion initiatives in a bid to revive demand.

For the full year, its revenue increased 1.5 percent at Rs 39427 crore against Rs 38835 crore. Net profit in FY16 was up 2.6 percent at Rs 9921 crore against Rs 9663 crore (YoY0. EBITDA margins stood at 38.2 percent against 36.6 percent (YoY).The company has announced bonus of 1 share of Re.1/- each, for every 2 existing ordinary shares of Re.1/- each held by members.