ITC Q3 net profit rises 15% to ₹4,056 cr, declares interim dividend

On a sequential basis, the profit after tax (PAT) grew by 9% from ₹3,713 crore in the September quarter.

The cigarette-to-hotel conglomerate’s revenue from operations surged 30% to ₹18,365 crore for the period under review as against ₹14,124 crore a year ago.

The company’s board has also approved an interim dividend of ₹5.25 per share for the current financial year.

The company has fixed Tuesday, 15 February, 2022 as the record date for the purpose of determining entitlement of the members for interim dividend.

The stock has been in focus in the last seven seven days amid Budget 2022 as investors awaited a decision on increase in taxes on Tobacco. With no announcement made, it was a sigh of relief for many.

The shares have gained 7.16% in the last five days. On Thursday, ahead of the results, ITC scrip closed 0.58% higher at ₹233.50 on NSE.

Segment wise, revenue from cigarette business came in at ₹6,958 crore as against ₹6,091 crore in the last year period, which is an increase of 14% year-on-year.

The segment clocked a profit before tax of ₹4,187 crore in third quarter, up 14% year-on-year.

“Robust recovery continued in the segment across markets aided by increase in mobility and, agile supply chain and market servicing,” the company said.

ITC said wide availability of smuggled cigarettes continued despite strong deterrent actions by enforcement agencies, leading to significant revenue loss to the government and adversely impacting the legal cigarette industry.

The non-cigarette FMCG business or FMCG-others revenues increased by 9% to ₹4,099 crore during the third quarter as against ₹3,752 crore a year ago. 

The PBT for the business came in flat at ₹246 crore during the December quarter as compared to ₹243 crore in the same quarter last year. Segment EBITDA (earnings before interest, tax, depreciation and amortisation) was up 46% over last year period with margins at 9.1% despite of unprecedented inflation in commodity prices.

The hotels business swung bank into profit (before the taxes) at ₹53 crore as against a loss of ₹72 crore in previous year period and ₹49 crore in the September quarter. The revenues, meanwhile, nearly doubled, rising 99.5% to ₹495 crore as compared to ₹248 crore in the last year period.

The company said occupancy is hotels has recovered to pre-pandemic levels with strong sequential improvement in ARRs but still below pre-pandemic levels

The domestic leisure travel and festive, wedding season has boosted demand with progressive improvement in business travel. However, the Omicron wave has impacted recovery momentum in January.

The revenues for hotels business have been augmented through sharply targeted packages (Welcombreak, City Getaways etc.) catering to emerging trends and consumer needs along with focused communication campaigns.

The business has undertaken various structural cost management actions in the past year which has led to significant reduction in the fixed cost table, thereby enhancing operating leverage on a sustainable basis.

The revenue from agri business came in at ₹5,157 crore for the third quarter as against ₹2,694 crore in the year-ago period, clocking a growth of 91%. The growth was driven by wheat, rice, spices, leaf tobacco exports leveraging strong customer relationships, robust sourcing network and agile execution.

The PBT for the same increased 22% to ₹348 crore when compared with ₹284 crore in the year-ago quarter.

Meanwhile, revenues from paperboards, paper and packaging segment rose 38% year-on-year to ₹2,046 crore, while the profit before tax for the same segment surged 57% year-on-year to ₹448 crore.

Paperboard volumes hit a record high during the quarter on the back of demand revival across most end-user segments and exports.

“The third wave of the pandemic has led to a surge in Covid cases in the country and temporarily halted the recovery momentum, particularly in the hotels business. While mobility restrictions and restricted hours of business have impacted categories with higher salience of out-of-home consumption, the impact is expected to be limited in view of the progressive reduction in Covid cases being recorded across various parts of the country,” ITC said in a filing.