ITC Q4 Earnings: Profit jumps 12% YoY to Rs 4,190.96 crore
Revenue rises: ITC’s total revenues increased 15% on-year to Rs 17,754.02 crore in Jan-Mar 22 period. The company had posted a revenue of Rs 15404.37 crore in the corresponding period. The cigarette segment which is the maximum contributor in revenue reported a 9.96% YoY rise in topline.
Profit beats estimates: ITC’s net profit jumped 11.80% YoY to Rs 4,190.96 crore in the quarter ended March 22. Analysts had earlier anticipated a net profit of about Rs 3,748 crore. ITC noted that the quarter witnessed a broad-based recovery in sales across markets and channels. The economic activity gathered further momentum during the quarter with the decline in Covid caseload intensity, and it led to higher profits for the company.
Margins stable: Operating profit rose 16.8% YoY to Rs 5,224 crore higher than the street estimate. Segment PBIT margin (ex-Agri Business) improved by 20 bps to 36.2% despite unprecedented inflation in commodity prices.
ITC results: Segment-wise performance
FMCG - Others
The FMCG-others segment saw a 12.3% YoY rise in revenues. The company reported strong growth in Discretionary/Out-Of-Home categories while staples & Convenience Foods remained resilient. Demand volatility in the Hygiene portfolio was in line with Covid intensity and remains significantly above pre-pandemic levels . Re-opening of schools/colleges aided the recovery in Education and Stationery. Q4 Segment EBITDA margins sustained at 9.0% despite unprecedented inflationary headwinds.
Cigarette: Mainstay business
ITC saw robust recovery across markets aided by an increase in mobility and an agile supply chain and market servicing. Stability in taxes is imperative for the legal industry to combat and progressively clawback volumes from illicit trade. The company launched new variants of Flake Excel, Wills Navy Cut Filter, and Berkeley Hero in focus markets. The net revenue for this business segment increased by 9.96% on year to Rs 7,177 crore and EBIT for the businesses was higher by 12.2% YoY at Rs 4,114 crore.
Hotels witnessed smart recovery despite the third wave impacting recovery momentum in Jan/Feb’22. Exit occupancies surpass pre-pandemic levels. Domestic leisure and wedding segments drive recovery with progressive improvement in business and nascent revival of international travel. The hotel's segment registered a revenue of Rs 407.42 crore, up from Rs 302.35 crore in the year-ago period.
Agribusiness registered revenue of Rs 4,375.42 crore as against Rs 3,383 crore in Q4FY21. The sharp growth in the segment revenue was driven by wheat, rice, and leaf tobacco exports while leveraging strong customer relationships, investments in sustainable value chains, a robust sourcing network, and agile execution.
Paper & Paperboards
Paperboards, paper, and packaging revenue stood at Rs 2,182.77 crore in the fourth quarter as against Rs 1,655.91 crore in the same period last year. The re-opening of educational institutions aided recovery but it was still below pre-pandemic levels.
Dividend: ITC will pay an interim dividend of Rs 6.25 per ordinary share of Re 1/- each for FY22. The record date for the payment of a dividend has been fixed at May 28, 2022, and the dividend will be paid to the eligible shareholders between 22nd July 2022 and 26th July 2022.