NEW DELHI :
ITC Ltd on Wednesday beat Street expectations with a 11.8% rise in March quarter standalone net profit as high revenue from cigarettes and fast-moving consumer goods (FMCG) offset an increase in expenses.
Profit in the three months ended 31 March climbed to ₹4,190.96 crore from ₹3,748.42 crore a year earlier. Revenue from operations grew 16% to ₹16,426 crore from ₹14,156.98 crore during the period.
Profit surpassed the ₹4,169 crore estimate in a Bloomberg survey of analysts. Revenue also exceeded the ₹14,762 crore estimate.
March quarter expenses at the maker of Bingo chips and Gold Flake cigarettes grew 15.7% from a year earlier to ₹11,658.05 crore. Earnings before interest, taxes, depreciation and amortization (Ebitda) rose 16.8%.
FMCG revenue grew 12.3% during the quarter to ₹4,141.97 crore, while cigarette revenue rose 10% to ₹6,443.37. ITC posted a “broad-based” recovery in cigarettes despite disruptions because of the third wave of covid with volumes surpassing pre-pandemic levels, it said.
“The FMCG businesses, despite an unprecedented increase in prices of key inputs, performed well through focused cost management interventions across the value chain, premiumisation, product mix enrichment, and judicious pricing actions,” the company said.
During FY22, ITC expanded its multi-channel go-to-market strategy while the market and outlet coverage was expanded up to 1.4 times and 1.1 times, respectively.
“Direct reach enhancement in rural markets was supported through a hub and spoke distribution model with the expansion of rural stockists network to 1.4 times over the previous year and collaborations with rural-focused eB2B players,” the company said in its March quarter update. The company launched more than 110 new products across target markets during the year, it said.
ITC is setting up a personal care and home care products manufacturing unit in Uluberia, West Bengal, in line with its strategy of building in-house manufacturing capabilities for products with unique formulations, enhancing supply chain agility and responsiveness, and reducing distance to market, the company said.
ITC’s March quarter numbers were a “strong show”, said analysts tracking the company.
“There was a beat of almost 5 to 6% versus our and consensus estimate. All the key businesses have done well. FMCG business saw decent performance in the current context. Parts of the business that have not done well in the past few years because of covid are essentially the stationery and education segment, which should be able to see a revival in FY 23,” said Abneesh Roy, executive vice president at Edelweiss Financial Services.
Meanwhile, the company’s hotel business made a smart recovery despite the third wave impacting recovery momentum in the first half of the quarter while exit occupancies surpassed pre-pandemic levels.
The hotels business reported segment revenue of ₹389.64 crore during the quarter, up 35.3% from a year earlier. The agriculture business segment reported a 29% growth in segment revenue during the quarter. This was driven by strong growth in wheat, rice, spices, and leaf tobacco exports on the back of strong customer relationships, robust sourcing network and agile executions, the company said.
Re-opening of educational institutions aided recovery in education and stationery products business though the segment is still below pre-pandemic levels.
Meanwhile, paperboards, paper and packaging segment revenue grew 31.8% from a year earlier in the March quarter. “Paperboard volumes were at record high. There was robust growth aided by demand revival across most end-user segments. The sustainable products portfolio continues to be scaled up,” the company said.