ITC Q2 Results: Profit rises 21% YoY to Rs 4,466 crore, beats estimates

ITC Ltd’s net profit for the quarter ended September rose nearly 21% on year to Rs 4,466 crore. The revenue-net of excise duty-increased nearly 27% to Rs 16,129.91 crore.

The net profit and revenue were above ET NOW poll of Rs 4,315 crore and Rs 15,884 crore, respectively.

Revenue from the mainstay cigarette business grew more than 23% on year to Rs 6,953.80 crore. Cigarettes constitute more than 80% of ITC’s net profit and about 45% of its topline. The non-cigarette fast-moving consumer goods (FMCG) business registered a revenue growth of 21% during the quarter to Rs 4,885 crore.


The hotel business saw a sharp recovery on the resumption of business and leisure travel. This segment’s revenue rose by a whopping 82% on year to Rs 536 crore. The agricultural business, the third major contributor to revenue, witnessed a 44% on year rise in revenue to Rs 3,997 crore. The paperboard and packaging business reported a 25% growth in sales to Rs 2,288 crore

ITC’s earnings before interest, taxes, depreciation and amortisation (EBITDA) for the quarter rose more than 27% on year to Rs 4,835 crore. But operating margin expansion was just 18 basis points from the previous year to 29.97%.

SEGMENT PERFORMANCE
Stability in taxes enabled continued recovery in cigarette sales volumes from illicit trade, the company said in a release. The profit before interest and tax (PBIT) for this segment grew by nearly 24% on year. The non-cigarette FMCG business reported strong growth on the back of a recovery in out-of-home and discretionary categories.

Further, the stationery products business witnessed strong traction. This segment’s operating margin improved 170 bps sequentially to 9.5%, even though it dipped by 50 bps YoY. The company’s multi-pronged interventions helped mitigate the inflationary pressure.

In the hotel business, average room rates and occupancy levels surpassed pre-pandemic levels. The operating margin stood at 29.0% against 20.4% in the same period of FY20, driven by higher revenue per available room and structural cost interventions.

Strong exports of wheat, rice and leaf tobacco drove the performance of the agricultural business, while higher demand across end-user segments and sustainable products portfolio aided the paper and packaging business in the quarter.

“The anticipated moderation in inflation going forward, normal monsoons in most parts of the country and proactive interventions by the government and RBI augur well for sustained recovery and a pick-up in consumption expenditure in the second half of the year,” the company said in the release.