ITC Q2 net profit marginally up 1.8% at Rs 5,054.43cr

New Delhi: Diversified entity ITC Ltd on Thursday reported a marginal 1.8 per cent rise in consolidated net profit to Rs 5,054.43 crore in the September quarter on subdued demand conditions, heavy rains and high food inflation.

The company had posted a consolidated net profit of Rs 4,964.52 crore in the July-September period of the previous fiscal, according to a regulatory filing.

ITC's revenue from operations jumped 15.62 per cent to Rs 22,281.89 crore in the September quarter. It was Rs 19,270.02 crore in the corresponding quarter of the previous fiscal.

The company had "subdued demand conditions, unusually heavy rains in parts of the country, high food inflation and sharp escalation in certain input costs (like leaf and wood) witnessed during the quarter", said ITC in an earning statement.

Amid a challenging operating environment, the company delivered a "resilient performance" during the quarter, and its gross revenue has a strong growth, "driven by Agri-Business and Hotels", it added.

Its total expenses were 20.92 per cent higher in the September quarter to Rs 16,056.86 crore.

The total income of ITC, which includes other income, rose 14.86 per cent to Rs 22,897.85 crore. It was Rs 19,934.9 crore a year ago.

During the quarter, ITC revenue from the 'total FMCG' segment, including the cigarettes business, grew 6.1 per cent to Rs 14,463.15 crore. It was Rs 13,631.46 crore in the corresponding September quarter.

"FMCG business demonstrated resilience amidst muted demand conditions, led by agile innovation and a slew of innovative product launches," it said.

Its revenue from the cigarette business increased 6.6 per cent to Rs 8,877.86 crore in the July-September quarter of this fiscal. It was Rs 8,328.21 crore in the corresponding quarter of the last fiscal.

In the cigarette business, ITC's market standing continues to be reinforced through strategic portfolio and market interventions with a focus on competitive regions and counter illicit trade. Moreover, differentiated and premium offerings continue to perform well, it added.

ITC's revenue from the FMCG-others segment rose 5.31 per cent to Rs 5,585.29 crore in Q2 FY25. The growth in the segment was driven by staples, biscuits, snacks, frozen snacks, dairy, premium soaps, homecare and agarbatti.

However, "notebooks impacted by high base effect and opportunistic play by local brands, led by a sharp drop in paper prices," said ITC.

The segment witnessed a marginal drop of 35 bps in margins amid inflationary headwinds in input costs, it added.

ITC's FMCG-others segment consists of branded packaged foods like staples, snacks, meals, dairy and beverages, confections, apparel, education and stationery products, personal care products, safety matches and incense sticks.

The revenue from ITC's Hotels segment surged 17 per cent to Rs 789.16 crore. The growth was driven by F&B, retail and wedding segments.

"Hotels Segment delivered a strong performance on a high base (LY includes G20 related business)," it said, adding that the EBITDA of the Hotel business expanded "70 bps YoY driven by higher RevPAR (revenue per available room), operating leverage and strategic cost management".

The agribusiness zoomed 46.57 per cent to Rs 5,845.25 crore in the September quarter of FY25, led by leaf tobacco and value-added agri products.

It has a "strong growth in leaf tobacco exports, leveraging strong customer relationships and new business development", and a value-added agri portfolio like coffee, fruits and vegetables, and spices also performed well.

ITC's revenue from 'paperboards, paper and packaging' segment increased 2.14 per cent to Rs 2,114.18 crore.

It remains impacted due to low-priced Chinese supplies in global markets, including India, soft domestic demand conditions and unprecedented surge in wood prices, said ITC.

Moreover, "subdued realisation, the surge in domestic wood prices and ocean freight continue to weigh on margins. Unseasonal rains adversely impact wood availability, quality and procurement price," it added.

The revenue from other segments -- including its information technology services and branded residences -- surged 10.03 per cent to Rs 1,004.27 crore against Rs 912.71 crore in Q2 FY24.

Meanwhile, in a separate filing, ITC informed that its board has recommended the approval of the appointment of Siddhartha Mohanty as a Non-Executive Director of the company for three years with effect from January 1, 2025. He will represent the Life Insurance Corporation of India.

Shares of ITC Ltd on Thursday settled at Rs 471.85 per scrip on BSE, down 1.81 per cent from its previous close.