ITC profit rises 10% to Rs 3,714 cr amid strong pick up in all segments

New Delhi: Cigarette-to-hotel conglomerate ITC reported 10 per cent growth in consolidated net profit at Rs 3,714 crore for the quarter ended September 30, 2021 (Q2FY22) on the back of a strong pick-up across all operating segments after severe disruptions in Q1.

The company had reported a net profit of Rs 3,366 crore in the year-ago period when the Covid-19 disruptions had severely impacted economic activity and demand shrank.

On a sequential basis, the net profit has risen 13 per cent from a level of Rs 3,276 crore in the April-June quarter of current fiscal.

The company’s revenue from operations rose 13 per cent in Q2 to Rs 1 4,844 crore from a level of Rs 13,147 crore in the same quarter last year. The FMCG major’s earnings before interest, tax, depreciation and amortisation stood at Rs 5,017 crore in July-September quarter.

The company said that its strategy that brought focus on innovation, digitalisation, product mix, operational efficiencies has been responsible is driving growth and improving margins across business segments.

ITC’s strategic investments in creating state-of-the-art integrated consumer goods manufacturing and logistics infrastructure, and nurturing of sustainable agri and fibre value chains are providing significant competitive advantage, and the same is being reflected in the growth numbers, the company said.

Segment wise, revenue from cigarette business came in at Rs 6,219 crore as against Rs 5,627 crore in the last year period, which is an increase of 10 per cent year-on-year. After significant disruptions in Q1, cigarette volumes witnessed smart recovery with exit volumes at near pre-Covid levels.

The FMCG-Others business delivered a resilient performance during the quarter, growing over 23 per cent on an annualised basis over a high base quarter last year. On a sequential basis, FMCG-Others revenues grew 8 per cent. Its EBITDA jumped 82 per cent on a YoY basis to Rs 403 crore and by 35 per cent sequentially. Even though the business was impacted by steep inflation, it was able to sustain its EBITDA margins at 10 per cent.

There was a sharp rebound in ‘Out-of-Home’ consumption on th back of improved mobility even as ‘at-home’ consumption moderated.

The hotel segment, which was one of the worst affected segment during the pandemic, made a smart recovery in Q2. The revenue from the hotels business inched up significantly to Rs 311 crore for the September quarter, up by a massive 253 per cent over last year as the footfalls increased with the easing of pandemic restrictions. The second quarter EBITDA has turned positive while the revenue back to Q4 FY 21 levels. There is also marked improvement in occupancy.

The company said that leisure destinations continue to perform well while business travel gathers momentum with easing of travel restrictions imposed during the second wave.

The company also reported a strong growth in agri business external revenue driven mainly by wheat, rice, and leaf tobacco exports, leveraging strong customer relationships and robust sourcing network.

The paperboards, paper and packaging segment has also delivered a strong performance as segment revenue is up 25 per cent YoY.

There was robust growth in Value Added Product (VAP) segment and strong performance in exports on a high base notwithstanding logistical challenges.

On Wednesday, ahead of the results, ITC shares were up 0.95 per cent to close at Rs 238.95 on NSE. So far since 2021, the scrip has surged by 11 per cent.