Beating street estimates, diversified conglomerate ITC on Monday reported a 38.36% year-on-year rise in its standalone net profit to Rs 4,169.38 crore for the first quarter this fiscal, aided by 41% y-o-y growth in its gross revenue from sale. The cigarette-to-FMCG-to-hotel major had posted a net profit of Rs 3,013.49 crore for the first quarter last fiscal.
Gross revenue from sale stood at Rs 18,163.56 crore for the period under review as against Rs 12,884.45 crore for the same period of FY22, according to a stock exchange filing. During the period under review, the conglomerate’s tax expenses rose 36.76% y-o-y to Rs 1370.17 crore.
ITC, in a statement, said its “robust performance” continued across segments as its Ebitda was up by 41.5% year-on-year during the first quarter of FY23. Abneesh Roy, executive director, Institutional Equities, Edelweiss Securities, said both sales and Ebitda growth were ahead of the consensus estimates. During the quarter, the conglomerate posted highest quarterly revenue and highest profits ever in over 14 years for its hotels business. It also saw record quarterly revenue and profits for its Paperboards, Paper & Packaging segment.
Revenue from the company’s cigarette business rose 29% y-o-y to Rs 6,608.98 crore, while operating profit from the segment increased 30% y-o-y to Rs 4,188.94 crore during the period, according to the stock exchange filing.The company said stability in taxes on cigarettes, backed by deterrent actions by enforcement agencies, enabled green shoots of volume recovery from illicit trade during the quarter.
According to Roy, cigarette volume growth during the period was 25-26% y-o-y and the business saw mix improvement as price hike was negligible on the year-on-year basis. Non-cigarette FMCG business registered 19.48% y-o-y growth in revenue to Rs 4,451.39 crore, while the segment posted a 17.55% y-o-y growth in operating profit at Rs 203.89 crore during this period.
The company said Ebitdamargin sustained during the quarter (-20 bps y-o-y) despite unprecedented inflationary headwinds. Sharp escalation in input costs mitigated through multi-pronged interventions such as strategic cost management, premiumisation, supply chain agility, judicious pricing actions, fiscal incentives, leveraging digital, optimising channel assortments and favourable business mix. It witnessed a robust growth in discretionary/out-of-home categories, while staples & convenience foods remained resilient.
The hotels business posted an over four-fold jump in its revenue to Rs 554.97 crore, while the segment posted an operating profit of Rs 112.16 crore against an operating loss of Rs 151.45 crore in the first quarter of the last fiscal.
Average room rate (ARR) and occupancy were ahead of pre-pandemic levels driven by retail (packages), leisure, weddings and MICE segments, ITC said. “The business also leveraged its iconic cuisine brands to promote dine-ins with limited-period menus, packaged along with special/festive occasions, featuring global and Indian favourites,” it said, adding domestic business travel continued to witness progressive normalisation. Inward foreign travel, however, remained well below pre-pandemic levels. Hotels business Ebitda margins for the quarter stood at 32.5% (vs. 17.5% in Q1 FY20).