ITC Profit Rises 24% To Rs 4,670 Crore On Strong Performance Across Segments

ITC Ltd on Thursday reported a 24 per cent increase in consolidated net profit at Rs 4,670 crore in the second quarter of FY23, led by a strong performance across segments including cigarettes and agri business.

The company had posted a net profit of Rs 3,763.73 crore during the July-September quarter of the previous fiscal, it said in a regulatory filing.

Its revenue from operations rose 25.35 per cent to Rs 18,608 crore in the second quarter of the current fiscal compared to Rs 14,844.38 crore in the year-ago period.

ITC's total expenses were at Rs 12,823.87 crore, up 25 per cent in Q2/FY 2022-23, as against Rs 10,258.26 crore in the corresponding quarter.

"Strong performance continues across segments," said the multi-conglomerate in its earnings statement.

Economic activity continued to gather momentum during the quarter along with improvement in business and consumer sentiments.

"However, input prices remained elevated even as some commodities witnessed softening in course of the quarter. Inflationary headwinds continued to weigh on consumption expenditure which was partly offset by the early onset of the festive season this year in some parts of the country," it said.

Amidst such a challenging operating environment, ITC's focus on "accelerated digital adoption, customer centricity, execution excellence and agility" enabled it to continue to deliver strong growth across operating segments during the quarter, the Kolkata-headquartered firm said.

During the quarter, revenue from the 'total FMCG' segment, which also includes cigarettes, was up 22.07 per cent to Rs 12,529.64 crore. It was Rs 10,263.67 crore in Q2/FY22.

Revenue from the cigarette business was up 22.75 per cent to Rs 7,635.38 crore in the July-September quarter of this fiscal. It was Rs 6,219.84 crore in the corresponding quarter last fiscal.

This was "backed by deterrent actions by enforcement agencies", which enabled continued volume recovery from illicit trade, said ITC.

ITC  continues to "reinforce market standing by fortifying the product portfolio through innovation, democratising premiumisation across segments and enhancing product availability" backed by superior on-ground execution, it added.

ITC's revenue from the FMCG-others segment was also up 21.03 per cent to Rs 4,894.26 crore in Q2/FY23 as against Rs 4,043.83 crore in the year-ago period.

ITC's FMCG-others segment consists of branded packaged foods such as staples, snacks, meals, dairy and beverages, confections, apparel, education and stationery products, personal care products, safety matches and incense sticks.

"The FMCG businesses witnessed strong growth across channels and markets (both urban and rural) driven by a ramp-up in outlet coverage, enhanced penetration and last mile execution," it said.

ITC, which has brands, including Aashirvaad, Sunfeast, Bingo, Fiama, Vivel and Classmate, said the sharp escalation in input costs was mitigated through strategic cost management, premiumisation, supply chain agility, judicious pricing actions, fiscal incentives, leveraging digital and optimising channel assortments.

Staples & Convenience Foods recorded "robust growth" during the quarter mainly driven by biscuits, atta and noodles. While discretionary/Out of Home categories as snacks, confectionery, agarbattis and fragrances continue to witness strong traction.

Revenue from ITC's Hotels segment was up 80.16 per cent to Rs 560.37 crore in comparison to a lower base of the pandemic-impacted corresponding quarter. It was Rs 311.04 crore in Q2/FY22.

In April-June quarter ARR (average room rent) and occupancy was "ahead of pre-pandemic levels" driven by retail (packages), leisure, weddings and MICE (meetings, incentives, conferences, and exhibitions) segments.

ITC's agribusiness was up 43.06 per cent to Rs 4,038.74 crore during the period under review. It was Rs 2,823.07 crore in the July-September quarter of the last fiscal.

"The business continues to enhance value capture by steadily growing its value-added portfolio straddling multiple value chains comprising spices, coffee, frozen marine products and processed fruits etc, leveraging the company's deep rural linkages and extensive sourcing expertise," it said.

ITC's revenue from 'paperboards, paper and packaging' segment was at Rs 2,287.58 crore, up 25 per cent from Rs 1,829.72 crore earlier.

During the quarter, Value Added Paperboard (VAP) sales grew at a "rapid pace" aided by higher realisation and strong exports performance. While fine paper segment also witnessed growth helped with pick up in the publications and notebooks segments.

Revenue from other segments, which includes its information technology services, branded residences etc, was up 8.88 per cent to Rs 801.69 crore as against Rs 736.27 crore of Q2/FY22.

Meanwhile, in a separate filing, ITC said its board in a meeting held on Thursday recommended for re-appointment of Nakul Anand as a Director and also as a whole-time director of the company for a period of one year with effect from January 3, 2023.

Shares of ITC Ltd on Thursday settled at Rs 349.70 on BSE, up 0.77 per cent from the previous close.