Gross Revenue was up “in a challenging operating environment, driven by Hotels, Value Added Agri products and Leaf Tobacco,” said ITC in an earning statement
New Delhi: Diversified group ITC Ltd on Thursday reported a marginal decline in consolidated net profit to Rs 5,176.99 crore in the quarter ended on June 30, 2024, amidst a challenging macroeconomic and operating environment.
The company had posted a consolidated net profit of Rs 5,189.61 crore in the April-June period of the previous fiscal, according to a regulatory filing from ITC.
ITC’s revenue from operation in the June quarter was up 7.45% to Rs 20,029.60 crore. It was at Rs 18,639.48 crore in the corresponding quarter previous fiscal.
Total expenses of ITC were 11.02% higher in the June quarter to Rs 13,791.01 crore. ITC’s total income, which includes other income, was up 7.03% to Rs 20,724.,48 crore in the March quarter.
Gross Revenue was up “in a challenging operating environment, driven by Hotels, Value Added Agri products and Leaf Tobacco,” said ITC in an earning statement.
FMCG, Others and Cigarettes delivered resilient performance amidst subdued demand conditions.
“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,” it said.
While Private Consumption expenditure remains relatively subdued, the Indian economy continues to be extremely resilient amidst a global growth slowdown on the back of multi-dimensional and purposeful policy interventions by the Government, with sustained public expenditure in creating physical, digital, agri and rural infrastructure, it said.
During the quarter, ITC revenue from the ‘total FMCG’ segment, which also includes the cigarettes business, was up 6% to Rs 14,341.02 crore in the June quarter as against Rs 13,528.37 crore of the corresponding quarter a year ago.
Revenue from the cigarette business was up 5.82% to Rs 8,842.22 crore in June of this fiscal, sustaining growth momentum.
In the segment “differentiated and premium offerings continued to perform well” in the cigarette business, said ITC.
During the quarter escalation in costs of leaf tobacco and certain other inputs were largely mitigated through improved mix, strategic cost management and calibrated pricing, it added.
ITC’s revenue from the FMCG-others segment was up 6.3% to Rs 5,498.80 crore in the first quarter of FY25. It was at Rs 5,172.71 crore in the year-ago period.
In the segment “staples, snacks, dairy, personal wash, fragrances, homecare and agarbatti drive growth,” it said adding extreme heatwave in the June quarter adversely impacted categories with higher salience of discretionary/out-of-home consumption.
Emerging channels such as Modern Trade, e-commerce, and Quick Commerce witnessed “robust growth” in the ‘FMCG-others segment’ on the back of sharp execution of channel-specific business plans, collaborations, format-based assortments and category-specific sell-out strategies.
While “competitive intensity remained high in certain categories such as Biscuits, Snacks, Noodles, Popular Soaps, Education and Stationery Products, including from local/regional players,” it said.
“Commodity prices were largely stable during the quarter compared to the base period, certain items such as sugar, potato, choco cream and edible oil witnessed a sequential uptick in prices,” it said.
Revenue from ITC’s Hotels segment was up 14.14% to Rs 713.30 crore in the June quarter, which witnessed strong growth across properties, despite fewer wedding dates and extreme heatwave/elections impacting domestic travel and out-of-home dining.
While sharing updates on this business, ITC said it has already received shareholders’ approval for the scheme on June 6 and a petition for sanction of the Scheme has been filed with NCLT on July 22, 2024.
Last year in August, the ITC board approved the demerger of its hotel business into a separate entity.
ITC’s agribusiness was up 22.2% to Rs 6,997.89 crore in the June quarter driven by value-added agri products, leaf tobacco and wheat.
“The Business delivered strong growth in exports of Spices and Coffee,” said ITC.
Leaf tobacco exports witnessed “robust growth” helped by agility in operations, strong customer relationships and new business development.
“The AI/ML powered real-time buying platform continues to be scaled up to facilitate efficient leaf tobacco buying across auction platforms,” it said.
Revenue from the ‘paperboards, paper and packaging’ segment was down 6.78% at Rs 1,976.85 crore, impacted by low-priced Chinese supplies in global markets including India, muted domestic demand and unprecedented increase in domestic wood costs.
“Subdued realisations, surge in domestic wood prices and ocean freight continues to impact margins,” said ITC adding structural advantages of the integrated business model, investments in High Pressure Recovery Boiler and proactive capacity augmentation in Value Added Paperboards aided in partly mitigating pressure on margins.
Revenue from other segments, which include its information technology services, branded residences etc, was down 2.24% to Rs 946.04 crore.
Shares of ITC Ltd on Thursday settled at Rs 493.75 on BSE, down 0.26% from the previous close.
