FMCG major ITC Ltd announced the financial results for the April to June quarter of FY24 on August 14. During the quarter under review, the company’s standalone profit surged 17.6% year-on-year (YoY) to ₹4,902.74 crore as against ₹4,169.38 crore in the same period last year. The revenue from operations of the salt-to-hotel conglomerate, however, declined by 7.2% year-on-year (YoY) to ₹16,995.49 crore in the June quarter as against ₹18,320.16 crore in the corresponding period of the previous year.
Sequentially, the company's standalone profit declined by 3.6% quarter-on-quarter as against ₹5,086.86 crore in the March quarter of FY23. The company's revenue from operations slumped by 2.9% quarter-on-quarter as against ₹17,506.08 crore in the Q4 of FY23.
During the quarter under review, the company’s total income stood at ₹17,704.23 crore, down by 4.98% as against ₹18,632.85 crore in the same period last year.
The company's revenue from operations from FMCG (fast-moving consumer goods) business was up 14.2% year-on-year (YoY) to ₹12,631.28 crore as against ₹11,060.37 crore driven by an increase in sales of staples, biscuits, noodles, beverages, dairy, agarbatti and premium soaps. The EBITDA (earnings before interest, tax, depreciation and amortisation) margin expanded 325 basis points (bps) year-on-year to 11%.
The company's revenue from operations in the cigarette segment surged by 10.9% to ₹7,465.27 crore in the June quarter as against ₹6,608.98 crore in the same period last year. "The business continues to counter illicit trade and reinforce market standing by fortifying the product portfolio through innovation, democratising premiumisation across segments and enhancing product availability backed by superior on-ground execution," says the company.
"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 leading to higher demand for Indian tobaccos and bolstering revenue to the exchequer from the tobacco sector," it adds.
The revenue from operations of the hotel business was up by 8.14% year-on-year to ₹600.18 crore as against ₹554.97 crore in the same period last year. The segment EBITDA grew by 12.9% year-on-year during the quarter under review. The EBITDA margin of the hotel business expanded by 140 basis points (bps) year-to-year to 33.9% driven mainly by higher RevPAR, curated packages, finest F&B offerings and strategic cost management initiatives, according to the company.
"Strong growth was witnessed in ARRs across properties, though Occupancy moderated on a high base due to relatively fewer wedding dates during the quarter and pre-planned renovations. The Business continued to focus on its strategy of offering a host of curated propositions across accommodation, dining and banqueting to augment revenues across properties," says the company.
Meanwhile, the ITC board has approved the demerger of the hotel business, and issued the equity shares to all the shareholders of the demerged company, in accordance with the share entitlement ratio i.e. for every 10 (Ten) Ordinary Shares of face and paid-up value of Re. 1 each held in the Demerged Company, 1 (One) equity share of face and paid-up value of Re. 1 in the Resulting Company”.
"Post the implementation of the Scheme, the shareholders of ITC will directly hold about 60% in the Resulting Company, proportionate to their shareholding in ITC; the balance stake of about 40% in the Resulting Company will be held by ITC," says the board.
"Overall, the shareholders of ITC will hold 100% of the ultimate beneficial economic interest in the Hotels Business (direct holding of about 60% and indirect holding of about 40% through ITC," it adds.