Result of ITC's first quarter: Profit climbs 30.24 %, revenue rises 35.9%
The ITC is showing a strong recovery across its operating segments despite operational constraints caused by the second Covid wave.
The ITC Limited reported consolidated net profit rose 30.24 percent to Rs 3,343.44 crore in the first quarter of 2021, helped by a “strong rebound” in its operating segments. In a regulatory filing, ITC reported a net profit of Rs 2,567.07 crore for the April-June quarter of the previous fiscal. The company’s operating revenue increased 35.91 percent to Rs 14,240.76 crore during the quarter under review, compared with Rs 10,478.46 crore in the same quarter a year ago.
According to ITC in a post-earnings statement, despite operational constraints after the second wave, the company has executed well across all operating segments.In Q1/FY 2021-22, total expenses were Rs 10,220.49 crore, up 28.27 percent from Rs 7,967.71 crore in the previous period.
In the second wave of Coronavirus infections, local lockdowns and mobility restrictions imposed by states rendered the operating environment extremely challenging and adversely affected the recovery momentum seen in recent quarters. The situation continues to improve with the gradual easing of restrictions and increased mobility from mid-June,” it stated. The company continues “closely monitoring” the situation, and it will be prepared to handle uncertainties in the business environment with agility so as to improve its market standing, ITC said.
It stated that “the lessons learned in dealing with the pandemic across sales and distribution, supply chain operations, innovation, and product development over the last few quarters will continue to be leveraged in this regard.” According to the company’s quarterly report, revenue from the FMCG business for April-June grew 23.68 percent, compared with Rs 7,708.99 crore for the same period last year.
ITC’s cigarettes business generated revenue of Rs 5,802.67 crore in Q1/FY2021-22, up 34.01 percent from Rs 4,330.05 crore a year ago.
According to ITC, the company experienced “strong sequential recovery momentum in cigarettes, which led to volumes reaching nearly pre-Covid levels in Q4 FY21,” though the second wave caused disruptions in convenience store operations.
There was a 10.43 percent growth in FMCG Other – segment revenue compared with last fiscal’s corresponding period of Rs 3,378.84 crore.
FMCG-others is ITC’s segment that includes branded packaged foods, snacks, meals, dairy and beverages, apparel, education and stationery products, personal care products, safety matches, and incense sticks, among others.
In a new normal, FMCG businesses demonstrated resilience and adaptability with speed and agility, ITC said.
A strong growth occurred on a favorable basis in discretionary/’out-of-home’ consumption.
Unlike the first wave, in which Staples and Convenience Foods experienced a significant uptick in demand, these categories are seen as relatively mild in the current quarter,” it added.
Additionally, e-Commerce sales more than doubled over the same period last year to account for 8 percent of FMCG Other segment revenue for the quarter.
The Businesses proactively engaged with e-Commerce platforms with account-specific strategies, SKU assortments, and aligned supply chains to support emerging demand efficiently,” it stated.
During the quarter under review, the company’s hotels business generated revenue of Rs 133.67 crore, a fivefold increase. During Q1/FY 2020-21, it was 24.92 crore.
After the second wave of the pandemic, mobility and travel restrictions became more restrictive, negatively impacting the progress seen in H2 of FY21,” said ITC, adding “with the reduction in new cases and eased restrictions in June’21, domestic leisure segment grew.”
During the April-June quarter, the company’s Agri-Business grew 9.17 percent to Rs 4,109.82 crore. In the corresponding quarter a year ago, it was 3,764.56 crore.
The company experienced strong growth in wheat, rice, and leaf tobacco exports, as well as soya sales in the domestic market.
The revenue of the paperboard, paper, and packaging verticals increased by 54.19 percent to Rs 1,582.65 crore. According to ITC, it was Rs 1,026.44 crore in the same period last year.
The company has a “robust performance” and expanded margins due to higher realizations, a richer mix, and operational efficiencies.
According to ITC, domestic sales of paperboards and specialty papers see positive trends in virtually all key segments, particularly pharmaceuticals and consumer goods, although disruptions continue in certain segments, including publications, cup stock, on-the-go liquid packaging, and wedding cards.
As compared to Q1/FY2021-22, revenues from “others” segments were Rs 680.26 crore, up 22.2 percent.
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