Paper, packaging segment affected by cheap Chinese supplies: ITC

FMCG major ITC on Thursday said that though its Paperboards, Paper, and Packaging segment moved towards demand recovery during Q1 of FY2024, the company’s performance was impacted as a result of cheap Chinese supplies flowing into international and Indian markets.

“While green shoots of demand recovery emerged during the quarter in the Paperboards, Paper & Packaging segment, performance remained impacted largely due to cheap Chinese supplies in international markets including India and a surge in domestic wood prices,” the company said in an exchange listing.

Moreover, the company further noted that performance remained impacted due to muted domestic demand as well as surging wood prices in the Indian market.


The company said that structural weakness in the Chinese economy persists.

Meanwhile, “Debt distress in emerging and low income economies,” said ITC.

ITC also observed strong growth in Value Added agricultural products that were mainly driven by coffee and spices.

ITC on Thursday reported a marginal uptick in its standalone net profit for the quarter ended June 30, 2024 at Rs 4,917.45 crore versus Rs 4,902.74 crore reported by the company in the year ago period. The profit after tax was below Street's estimates of Rs 5,122 crore.

FMCG segment revenue jumped 6.3% on a high base with staples, snacks, dairy, personal wash, fragrances, homecare and agarbatti driving growth. The segment EBITDA margin expanded 25 bps YoY to 11.3%. Cigarettes net segment revenue was up 7% and segment PBIT (Profit Before Interest and Taxes)up 6.5% YoY.