Cigarette-to-hotel conglomerate ITC Ltd posted on Thursday a 11.5% year-on-year drop in standalone net profit in the December quarter though the figure came slightly ahead of Street expectations at ₹3,662.85 crore. A Bloomberg poll of 17 analysts had forecast a net profit of ₹3,613.50 crore while 14 analysts estimated standalone revenue of ₹11,935.80 crore.
The maker of Aashirvaad wheat flour and Savlon soaps recorded a 4.7% year-on-year rise in standalone revenue to ₹12,580.40 crore in the quarter, thanks to growth in its agricultural products business and moderate growth in FMCG-others segment comprising packaged food and personal care brands.
ITC’s cigarette business saw a further recovery in the December quarter, while its soap and hand sanitizer brand Savlon clocked ₹1,000 crore in consumer spending in 2020. Revenue from the hotels business—one of the worst-hit sectors—plunged 57% from a year ago to ₹552.31 crore. “ITC’s Q2FY21 results were in line with our estimate on the revenue front but below our estimates on the margin and earnings front,” analysts at ICICI Direct Research said in a note.
For the quarter ended December, revenue from cigarettes grew 3.5% from a year earlier to ₹5,498.43 crore, though volumes declined. “Volumes and revenue witnessed strong sequential recovery led by metros on the back of progressive easing of restrictions and enhanced mobility,” the company said. Cigarette volumes have still not recovered fully given prevalent work from home culture and restricted outdoor activities, analysts at ICICI Direct said.
{{/usCountry}}For the quarter ended December, revenue from cigarettes grew 3.5% from a year earlier to ₹5,498.43 crore, though volumes declined. “Volumes and revenue witnessed strong sequential recovery led by metros on the back of progressive easing of restrictions and enhanced mobility,” the company said. Cigarette volumes have still not recovered fully given prevalent work from home culture and restricted outdoor activities, analysts at ICICI Direct said.
{{/usCountry}}Revenue from the FMCG-others segment—comprising packaged food and personal care brands such as Sunfeast biscuits and Savlon soaps—rose 7.5% during the quarter to ₹3,561.83 crore. The segment saw demand moderate as markets opened and consumers reduced purchase of essentials compared to last year when the strict lockdown curbs led people to stock up.
Ebitda or earnings before interest, taxes, depreciation and amortization in the FMCG-others segment grew 28% to ₹326 crore in the last quarter with margins expanding by 150 bps y-o-y to 9.2%. This was driven by higher operating leverage, enhanced operational efficiencies, portfolio premiumization and product mix enrichment, ITC said. The company said it launched more than 100 products in last nine months in hygiene, health and wellness, naturals and convenience categories.