ITC Ltd on Monday posted its fiscal first quarter profit at Rs 5180.12 crore, up 16.1 per cent in comparison to Rs 4462.25 crore during the first quarter of FY23, surpassing estimates. It posted revenue from operations at Rs 18,639.48 crore, down 6.0 per cent as against Rs 19,831.27 crore during the corresponding quarter of previous year. According to CNBC TV18 estimates, ITC was expected to post a profit of Rs 4800 crore during the quarter ended June 2023 and the revenue during the period was expected at Rs 17,300 crore.
Meanwhile, on a standalone basis, ITC’s Q1 profit stood at Rs 4902.74 crore, up 17.6 per cent in comparison to Rs 4169.38 crore during the first quarter of FY23. Amidst a challenging operating environment and high base effect in some of its operating segments, ITC said, the Company sustained its strong growth momentum during the quarter driven by focus on customer centricity, accelerated digital adoption, execution excellence and agility.
ITC’s Q1 performance across business verticals
FMCG: ITC’s FMCG business posted a revenue growth of 16.1 per cent on-year to Rs 5166 crore. While staples, biscuits, noodles, beverages, dairy, agarbatti and premium soaps posted strong growth, education and stationery products business continued to witness strong traction, it said. “The businesses continued to drive improvement in profitability through multi-pronged interventions viz. premiumisation, supply chain optimisation, judicious pricing actions, digital initiatives, strategic cost management and fiscal incentives,” ITC said in a regulatory filing. The segment witnessed growth in both urban and rural markets with traction from both traditional and emerging channels (viz. modern trade, e-commerce, quick commerce).
Under its branded packaged foods businesses, Aashirvaad Atta delivered healthy performance while value-added atta range sustained its strong growth momentum driven by increased thrust in modern trade and e-commerce channels. Besides, ITC said, Sunfeast biscuits and cakes recorded strong growth during the quarter, driven by robust performance of the core portfolio and scaling up of several differentiated variants launched recently. YiPPee! noodles posted healthy performance on the back of increased penetration and brand outreach. Meanwhile, dairy & beverages posted strong growth during the quarter on the back of best-in-class quality standards, differentiated offerings and superior taste profile.
In the personal care products business, Fiama range of products registered strong growth fuelled by investments in brand building, wider distribution and growth across channels.
In the education and stationery products business, Classmate notebooks delivered a superior performance driven by portfolio premiumisation, judicious pricing actions, exports and leveraging institutional strengths. The premium portfolio comprising Paperkraft, Classmate Pulse and Classmate Interaktiv continued to gain strong traction.
Mangaldeep Agarbattis and Dhoop recorded good growth during the quarter leveraging a portfolio anchored on a wide range of differentiated products.
Cigarettes: ITC’s cigarettes business posted Q1 revenue at Rs 7465.27 crore. ITC said that the company launched several differentiated variants recently which continued to perform well.
Hotels: ITC posted its best-ever Q1 performance for its hotels business. The segment revenue grew 8.1 per cent YoY on a high base (1.5x of Q1FY20) and the segment PBIT grew by 17.0 per cent on-year. “Strong growth was witnessed in ARRs across properties, though occupancy moderated on a high base due to relatively fewer wedding dates during the quarter and pre-planned renovations. The Business continued to focus on its strategy of offering a host of curated propositions across accommodation, dining and banqueting to augment revenues across properties,” it said. The segment EBITDA margin expanded by 140 bps YoY to 33.9 per cent driven mainly by higher RevPAR, curated packages, F&B offerings and strategic cost management initiatives, the company added. During the quarter, it added 6 hotels to the Group portfolio including Welcomhotel Hamsa Manali and Storii Moira Riviera.
Paperboards, Paper & Packaging: The paperboards, paper & packaging segment reflects the impact of subdued demand (domestic and exports), sharp reduction in global pulp prices and high base effect. The segment revenue declined 6.5 per cent YoY (2-year CAGR +16 per cent) and segment PBIT declined 22.9 per cent YoY (2-year CAGR +10 per cent). “Subdued demand in the EU and China, low priced Chinese supplies in global markets, steep decline in global pulp prices on a high base and relatively muted customer offtake in domestic markets (destocking) weighed on performance during the quarter,” ITC said.
Agri business: ITC’s agri business revenue grew by 31 per cent YoY (ex-Wheat exports) driven by value added agri products and leaf tobacco and the segment PBIT grew by 25.3 per cent YoY. “Restrictions imposed on wheat and rice exports by the Government in the backdrop of inflationary headwinds and food security concerns weighed on Segment Revenue during the quarter,” the company said.