 "ITC Q4 results: Net profit down 1.06% to Rs 5,121 cr, revenue increases")
Cigarette-to-soap conglomerate ITC reported a 1.06 per cent year-on-year (Y-o-Y) drop in consolidated net profit during the January-March quarter (Q4) of 2023-24 (FY24) to Rs 5,120.55 crore from Rs 5,175.48 crore, primarily dragged down by the agri, paperboard, paper, and packaging businesses.
The company reported consolidated revenue from operations of Rs 19,446.49 crore for Q4FY24, a 2.03 per cent increase compared to Rs 19,058.29 crore in the year-ago period.
Revenue net of excise at Rs 17,923 crore came in slightly below the Bloomberg consensus estimate of Rs 18,105.5 crore.
However, net profit exceeded the Bloomberg estimate, which pegged net adjusted income at Rs 5,066.3 crore.
Sequentially, gross revenue in Q4FY24 decreased by 0.19 per cent, and net profit was down by 4.02 per cent.
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For the full year (FY24), revenue from operations stood at Rs 76,840.49 crore, up by 0.42 per cent, while net profit reached Rs 20,458.78 crore, up by 6.6 per cent.
The company’s board has recommended a final dividend of Rs 7.5 per share.
ITC pointed to subdued consumption demand in Q4FY24 but mentioned that improving macroeconomic indicators, prospects of a normal monsoon, and green shoots witnessed in rural demand recovery after several quarters bode well for a consumption demand revival in the near term.
With its focus on consumer-centricity, purposeful innovation, agility, and execution excellence, the company remains confident of navigating short-term challenges and creating sustained value for all stakeholders.
The heavy-lifting cigarette segment recorded a 7.5 per cent Y-o-Y growth in revenue at Rs 8,688.92 crore in Q4FY24. Pre-tax profits from the segment reached Rs 5,157.57 crore in Q4FY24, marking a 4.9 per cent increase compared to the year-ago period.
The cigarette segment witnessed volume consolidation on a high base after a period of sustained growth momentum.
Regarding the non-cigarette fast-moving consumer goods segment, the company mentioned that despite weak demand conditions and a significant increase in competitive intensity from regional and local players, it delivered a “resilient” performance.
Revenue from the segment stood at Rs 5,307.94 crore, a 7.2 per cent Y-o-Y increase. Pre-tax profit for Q4FY24 was at Rs 479.84 crore, down by 4.74 per cent Y-o-Y.
However, the company noted that the base quarter included certain fiscal incentives (production-linked incentive) from the previous period, and excluding them, segment profit before interest and tax was up by 15 per cent.
The hotel segment delivered another record performance in Q4FY24, with a 15 per cent Y-o-Y increase in revenue at Rs 931.03 crore. Pre-tax profit from the segment in Q4FY24 was Rs 264.22 crore, up by 28.9 per cent Y-o-Y.
On the demerger of hotels, the company stated that the scheme of arrangement for demerger was filed with the National Company Law Tribunal (NCLT). The NCLT has directed the convening of a meeting of shareholders of ITC on June 6, 2024, to consider and approve the scheme.
ITC’s performance in the agribusiness was impacted by trade restrictions on agri commodities imposed by the government. Revenue from the segment stood at Rs 3,136.43 crore in Q4FY24, a decrease of 13.05 per cent. Pre-tax profit stood at Rs 186.52 crore in Q4FY24, down by 38.75 per cent.
The paperboard, paper, and packaging segments remained impacted by low-priced Chinese supplies in international markets (including India), muted domestic demand, a surge in wood costs, and a high base effect.
Revenue from the segment in Q4FY24 was at Rs 2,072.86 crore, down by 6.67 per cent Y-o-Y. Pre-tax profit from the segment at Rs 291.06 crore was down by 34.59 per cent Y-o-Y.