ITC hits 52-weeks high after strong Q2 results

Shares of FMCG major ITC hit a 52-week high at ₹354, after the company reported an increase in net profit by 20% at ₹4,466 crore, for the July to September quarter against ₹3,697 crore during the same period last year, beating analyst estimates. On a quarter-on-quarter basis, the company’s profit surged 7.1% as compared to ₹4,169 crore in the April-June quarter this year.

In the July to September quarter, the company’s standalone revenue from operations witnessed an uptick of 26.6% at ₹16,130 crore as compared to ₹12,731 crore for the same period last year. However, on a quarter-on-quarter basis, the revenue declined 6.7% as compared to ₹17,829 crore last year.

The company’s earnings before interest, taxes, depreciation and amortisation (EBITDA) grew 27.7% at ₹5,863.7 crore this year as compared to ₹4,615 crore during the same period last year. In the FMCG segment, the company’s revenue grew 21% year-on-year (YoY) to ₹4,885 crore, and EBITDA margin improved 9.5%.

“The FMCG Businesses witnessed strong growth across channels and markets (both urban and rural) driven by ramp-up in outlet coverage, enhanced penetration and last mile execution. Sharp escalation in input costs was mitigated through multi-pronged interventions viz. strategic cost management, premiumisation, supply chain agility, judicious pricing actions, fiscal incentives, leveraging digital and optimising channel assortments. Segment EBITDA margins have expanded by 280 bps over Q2 FY20,” the company said.

For the cigarette segment, the company’s revenue witnessed a surge of 23.3% at ₹6,594 crore YoY. “As seen in the past, stability in taxes on cigarettes, backed by deterrent actions by enforcement agencies, continues to enable volume recovery for the legal cigarette industry from illicit trade, thereby engendering domestic demand for Indian tobaccos, while also mitigating loss of tax revenue to the exchequer. The company continues to engage with policy makers for a framework of equitable, non[1]discriminatory, pragmatic, evidence-based regulations and taxation policies that balance the economic 5 imperatives of the country and tobacco control objectives, cognising for the unique tobacco consumption pattern in India,” ITC said.

In the hotel segment, the company’s revenue was up 25.6% YoY at ₹536 crore YoY, whereas the company’s EBITDA was up ₹138 crore YoY. In the paperboards, paper and packaging segment, the revenue was up 25% YoY, whereas in the agri business, the revenue grew by 44% YoY.

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