ITC Q1 net profit up 34% at ₹4,390 cr; revenue rises 37.2%

Diversified conglomerate ITC Limited has reported a consolidated net profit of ₹4,389.76 crore during the April-June quarter of 2022-23, a 33.9% growth over ₹3,277 crore profit during the same quarter last year. The profit was led by the FMCG segment and cigarette business, followed by a steady performance from agri and paper business, and continued recovery in the hotels business.

Revenue from operations rose 37.2% to ₹20,152 crore in April-June 2022 from ₹14,687.80 crore during the same period last year, an exchange filing shows.

Total expenses for the said period stood at ₹14,201.51 crore on a consolidated basis, up from ₹10,220.49 crore during last year's period. Segment-wise, FMCG, including cigarettes, accounted for the highest revenue for the company during the April-June period at ₹11,922.81 crore, while the revenue from hotels, agri business, paperboards, paper and packaging stood at ₹580.71 crore, ₹7,492.14 crore and ₹2,267.22 crore, respectively.

"Stability in taxes on cigarettes, backed by deterrent actions by enforcement agencies, enable green shoots of volume recovery from illicit trade," says the FMCG giant. In FMCG, robust growth was seen in discretionary or out-of-home categories, while staples and convenience foods remained resilient, says ITC.

The education and stationery products business bounced back with the re-opening of educational institutions, but hygiene portfolio sales remained subdued. In hotels, average room rate (ARR) and occupancy have moved ahead of pre-pandemic levels, with retail (packages), leisure, weddings, and meetings, incentives, conventions and exhibitions (MICE) segments driving growth, says the company.

The company's total liabilities as of June 30, 2022, were at ₹16,556.52 crore during Q1 FY23, up 28.4% from ₹12,899.33 crore during the same quarter last year.

ITC sustained a "high growth trajectory" in agri business, and segment-wise, the consolidated revenue surged 82.7% y-o-y in Q1, driven by wheat, rice and leaf tobacco exports. Paperboards, paper and packaging segment revenue grew 43.3% y-o-y along with margin expansion of 220 bps, says the company.

The biggest cigarette and second largest FMCG company in India, however, says geopolitical tensions and persistent supply chain disruptions resulted in the hardening of commodity prices, exacerbating the unprecedented inflationary conditions prevailing in the economy.

According to ITC, while the trajectory of inflation remains a key monitorable, prospects of a favourable monsoon and the recent moderation in prices of key commodities, along with proactive interventions by the government and the Reserve Bank of India (RBI), augur well for sustained economic recovery and a pick-up in consumption expenditure.

ITC had reported an 11.8% year-on-year growth in its net profit at ₹4,191 crore for the fourth quarter ended March 31, 2022. The revenue rose 15% y-o-y to ₹17,754 crore in Q4FY22.

The ITC stock closed 1.52% up at ₹307.55 on the BSE today, while hitting the day’s high at ₹308.8 during the intra-day trade. The stock has gained after two days of consecutive fall and is trading higher than 5-day, 20-day, 50-day, 100-day and 200-day moving averages. In one-year returns, the stock has outperformed the benchmark index Sensex by 39.51%. The stock has risen 4.21% in the past week, while 5.45% in the past month. The stock has been up by 32.59% in the past six months and 40.48% up in the year-to-date period.