ITC Q1 results: Net profit jumps 17.58% to Rs 4902.74 crore, revenue falls 7%, exceeds estimates

Total revenue of the company is Rs 16995.49 crore, falling 7.2 percent from Rs 18320.16 crore in the year-ago quarter, the company said in a regulatory filing.

ITC Ltd. on August 14 reported standalone net profit at Rs 4902.74 crore for the June quarter of FY24, registering a growth of 17.58 percent from Rs 4,169.38 crore in the same quarter of the previous financial year.

Total revenue of the company is Rs 16995.49 crore, falling 7.2 percent from Rs 18320.16 crore in the year-ago quarter, the company said in a regulatory filing.

The net profit was largely in line but revenue missed expectations. According to a poll of six brokerages the net profit was expected at Rs 4,838.8 crore and revenue at Rs 17,326 crore.

The Board at its meeting held today subject to necessary approvals, considered and approved demerger of Hotels Business under a scheme of arrangement amongst ITC Limited and ITC Hotels Limited and their respective shareholders and creditors under Sections 230-232 and other applicable provisions of the Companies Act, 2013.

Earnings before interest, tax, depreciation and amortization (EBIDTA) for the quarter was at Rs 6250.1 crore growing by 10.7 percent. EBIDTA margin was at 39.5 percent and grew by 680 basis points YoY. One basis point is one-hundredth of a percentage point.

Robust growth in FMCG - Others with segment revenue up 16.1 percent YoY and to exceed Rs. 5,000 crores in a quarter for the first time. This growth is led by staples, biscuits, noodles, beverages, dairy, Agarbatti and premium soaps.

The company witnessed continued strong performance by Cigarettes Segment; Net Segment Revenue up 10.9 percent YoY due to sustained volume claw back from illicit trade on the back of deterrent actions by enforcement agencies and relative stability in taxes.

The Hotels business saw a 8.1 percent rise in segment revenue YoY on high base. The company added 6 new hotels to the ITC Hotels Group during the quarter. Agri Business revenues rise 31 percent YoY driven by leaf tobacco and value-added products. Export restrictions limit opportunities due to global food concerns.

Subdued demand conditions (domestic and exports), low priced Chinese supplies in global markets, sharp reduction in global pulp prices and high-base effect weigh on the Paperboards, Paper and Packaging Segment.

The global economy faces slowdown due to high inflation and interest rates, particularly in advanced countries. While China's post-'zero covid' growth seems weaker, India's economy is resilient, with increased tax collections, controlled inflation, and growing credit. Consumer demand is showing recovery signs. However, external risks, food inflation, commodity price changes, and El Nino's potential effects on monsoons and agriculture remain concerns for the near future, the company said in a press release.

On August 14, shares of ITC closed 0.21 percent lower at Rs 447.80 on NSE.