ITC Limited (ITC), on May 18, reported an 11.7 percent growth in consolidated net profit at Rs 4,196 crore for the fourth quarter of FY2021-22 as against Rs 3,755 crore recorded a year ago. On a sequential basis, the profit has inched up 3.4 percent from Rs 4,057 crore earned during the October–December period.
Consolidated revenue for the largest cigarette maker in India rose 15.3 percent on-year to Rs 17,754 crore as compared to a revenue of Rs 15,404 crore registered in the year-ago quarter. On a sequential basis, the revenue was down 3.3 percent from the revenue of Rs 18,366 crore recorded in the previous quarter.
For the full year period from April – March 2022, the consolidated PAT witnessed a growth of 15.8 percent to Rs 15,243 crore from the profit of Rs 13,161 crore achieved during FY21.
Consolidated revenues for FY22 jumped 22.7 percent to Rs 65,205 crore from the revenues of Rs 53,155 crore for last year.
Net of excise, the revenues for the quarter came in at Rs 16,556 crore, a growth of 12.8 percent on year and a dip of 4.7 percent on quarter. For the full year period, the net revenues were recorded at Rs 60,668 crore, a growth of 16.9 percent over FY21.
The performance was driven by healthy growth across its business of cigarettes (both volume and price increase), FMCG, Hotels and Paperboards and agri-business.
"ITC has beaten all the market estimates and growth can be seen in all the businesses from cigarettes to FMCG, Hotels to Paperboards and agri-business", said Rahul Sharma, Research Head at Equity 99.
"The Sales growth, revenue, EBIDTA, all numbers are above expectations and the results of strategy reset by Chairman Sanjiv Puri is now visible across verticals", added Sharma.
FMCG - Others
The business segment generated revenues of Rs 4,149 crore for the quarter as compared to Rs 3,694 crore in the corresponding quarter last year, registering an on year growth of 12.3 percent. EBITDA (earnings before interest, tax, depreciation and amortization) for the business came in at Rs 238.47 crore compared to Rs 183 crore in the year ago period.
The business was able to improve the EBITDA margins by 75 bps YoY to 9 percent despite inflationary headwinds.
“The FMCG business, despite unprecedented increase in prices of key inputs, performed well through focused cost management interventions across the value chain, premiumisation, product mix enrichment and judicious pricing actions”, the company said.
The Company executed over 110 new product launches across target markets.
The revenues from the Cigarette business grew by 10 percent on year to Rs 7,177 crore while sequential growth came in at 3 percent.
EBITDA for the quarter was registered at Rs 4,357 crore compared to Rs 3,895 crore in the year ago period.
The cigarette volume for the company have now reached the pre-pandemic levels.
The revenue for the business jumped 29 percent on year to Rs 4,375 crore but on a sequential basis, there was a decline of 15 percent in the revenues of the business.
“The growth was driven by wheat, rice, leaf tobacco exports leveraging strong customer relationships, investments in sustainable value chains, robust sourcing network and agile execution”, the company said in its release.
EBITDA for the segment grew 30 percent on year to Rs 244 crore but declined 30 percent from the previous quarter.
Hotel revenues jumped 35 percent on year to Rs 407 crore for the quarter. The omicron wave impacted the performance of the business as it witnessed a sequential decline of 18 percent in the revenues.
Consequently the business incurred a loss of Rs 29 crore at EBITDA level compared to a loss of Rs 40 crore during the same quarter last year. The business had an EBITDA of Rs 53 crore in the quarter ended December 2021.
“There was sequential improvement in ARRs (average room rates); however, remain below pre-pandemic levels”, the company said in its release. “Domestic leisure and wedding segments drive recovery; progressive improvement in business travel; nascent revival of international travel”.
Paperboards, Paper and Packaging
The business delivered strong performance with its revenues growing by 32 percent on year to Rs 2,183 crore. The sequential growth was 7 percent.
EBITDA for the business jumped 39 percent on year to Rs 450 crore, but was flat on a sequential basis.
“Paperboard volumes were at record high aided by demand revival across most end-user segments”, the company said. It continued to scale up its sustainable products portfolio. “Integrated business model, Digital & Industry 4.0 initiatives and proactive strategic interventions enable margin expansion amidst commodity price escalation”.
Net cash generation from operations stood at over Rs 13,000 crores, a growth of 32 percent year on year.
The company recommended a final dividend of Rs 6.25 per ordinary share of 1/- each for the financial year ended March 31, 2022 and will be paid between Friday, 22nd July, 2022 and Tuesday, 26th July, 2022 to the eligible shareholders. The record date for the payment of dividend has been fixed as May 28, 2022.
"The stock has been performing well even in the bear market and such results will take it to new high", added Sharma.
ITC stock ended Rs 2.1 higher at Rs 266.8 on May 18 at the National Stock Exchange. The stock has gained 27 percent during the past one year.