Net profit of fast-moving consumer goods firm ITC Ltd jumped 10.3% year-on-year to ₹4,927 crore for the quarter ended September.
The tobacco-to-hotel conglomerate's revenue from operations stood at ₹17,705.08 crore, up 3.17% compared with ₹17,159.56 crore in the corresponding period a year ago.
ITC says it witnessed resilient performance in the cigarette business, aided by sustained volume clawback from illicit trade on the back of deterrent actions by enforcement agencies and relative stability in taxes.
The FMCG business clocked revenue growth of 8.3% year-on-year on a high base to ₹5,292 crore while EBITDA (earnings before interest, taxes, depreciation, and amortisation) margins expanded 150 basis points to 11%.
Atta, spices, personal wash and agarbatti led growth amidst a relatively subdued consumer demand environment, the company says.
"The FMCG businesses continued to witness robust growth in both urban and rural markets on a high base, driven by enhanced distribution footprint, superior last mile execution, deep consumer insights, purposeful innovation and portfolio premiumisation," it says.
Both traditional and emerging channels like e-commerce and quick commerce witnessed robust traction driven by sharp execution of channel-specific business plans, collaborations, format-based assortments catering to the needs of a diverse set of shoppers and category-specific sell-out strategies, says ITC.
Certain categories such as Biscuits, Snacks, Noodles, Soaps witnessed increasing competitive intensity including from local or regional players in the backdrop of commodity price deflationary conditions, it says.
"While commodity prices declined on a YoY basis, the overall input cost table remains elevated compared to pre-pandemic levels; certain commodities such as wheat, maida, sugar, potato etc. witnessed sequential uptick in prices. The Businesses remain focused on driving profitability improvement through multi-pronged interventions viz. premiumisation, supply chain optimisation, digital interventions across the value chain, strategic cost management and judicious pricing actions," the conglomerate says.
Revenue of the agri business jumped 26.4% year-on-year. During the quarter, stock limits on wheat, ban on non-basmati rice exports and export duty on parboiled rice, further limited business opportunities for the agri business.
"Geopolitical tensions and climate emergencies have led to concerns over food security and food inflation globally. To ensure India remains food secure, Government has had to impose trade restrictions on agri commodities; consequently limiting business opportunities for the Agri Business," the company says.
The company saw record-high second-quarter performance in the hotel business. Revenue rose 21% year-over-year while EBITDA margin increased 170 bps to 30.7%.
In July, the board of directors of ITC accorded its in-principle approval to the demerger of the conglomerate's hotels business. Under the new scheme, the cigarette-to-FMCG company will hold a stake of about 40% in the new entity and the balance shareholding of about 60% to be held directly by the company's shareholders proportionate to their shareholding in the company.
