ITC results: FMCG and agri-business drive revenue for ITC in Q3
The conglomerate’s net profit dipped year-on-year by 11.5 per cent at Rs 3,662.8 crore, while on a sequential basis it improved by 13.3 per cent. ITC, in its earnings release, said the decline was 3.7 per cent on a comparable basis after adjusting for one-time benefit of Rs 340 crore in the base period due to reduction of corporate tax rate.
ITC further said the revenue for the quarter was driven by FMCG and agri-business, both growing in double-digit pace, while there has been a demand moderation in certain FMCG categories with consumers broadening their purchase assortment and lower ‘at-home’ consumption due to increased mobility.
The company said there are green shoots of recovery in aggregate demand and supply, while the reduction in daily Covid cases and ongoing vaccination drive are expected to provide a fillip to business sentiment and consumer confidence.
While the results were declared after trading hours, the ITC scrip on Thursday fell by 0.53 per cent to close at Rs 226.45, while the benchmark Sensex closed with a gain of 0.43 per cent. ITC on Thursday also declared an interim dividend of Rs 5 per share for the financial year 2020-21.
ITC’s flagship cigarette business revenue surged by 3.5 per cent year-on-year at Rs 5,498.4 crore for Q3, while on a sequential basis it improved by 7.3 per cent. The cigarette business gross profit for the quarter declined by 8 per cent at Rs 3,452.7 crore, as compared to last year though it grew by 6.4 per cent sequentially. ITC said the cigarette business volume and revenue recovered sequentially, led by the metros and large towns.
The FMCG business comprising packaged food, personal care and agarbatti improved sales by 7.5 per cent at Rs 3,561.8 crore as compared to same period last year, while on a sequential basis it declined by 6 per cent. The FMCG business’ earnings before interest, taxes, depreciation and amortization (EBITDA) for the quarter surged by 27.5 per cent at Rs 326.2 crore as compared to last year.
ITC said the revenue of the FMCG business surged by 11 per cent year-on-year excluding the lifestyle retailing business which is under restructuring and the stationary business which continues to be impacted due to closure of educational institutions.
It said categories like staples, convenience foods, health and hygiene products grew by a record 11 per cent, while discretionary and ‘out-of-home’ categories recovered to grow by 11 per cent. The Savlon brand clocked Rs 1,000 crore consumer spend in the fiscal year till December.
ITC said there has been a progressive improvement in hotel business revenue which turned EBITDA positive in December 2020 and broke-even for the quarter. The business revenue jumped by 187% sequentially at Rs 235.2 crore, while on a year-on-year basis it declined by 57%. ITC said aggressive cost reduction measures led to about 44% reduction in controllable cash fixed costs.
ITC is the country’s largest cigarette maker accounting for three out of four cigarettes sold legally, second largest hotel chain and the third largest listed packaged food company.
