ITC Ltd.'s quarterly profit rose, beating estimates, bolstered by continued growth in the cigarette business even as weakness in the farm business persisted.
Net profit attributable to the owner of Aashirvaad and Sunfeast brands rose 23% over a year earlier to Rs 5,006.65 crore in the quarter ended December, according to its exchange filing. That compares with the Rs 4,700 crore consensus estimate of analysts tracked by Bloomberg.
Revenue at India's largest cigarette maker increased 4% year-on-year to Rs 19,020.65 crore, against a forecast of Rs 18,300 crore.
ITC Q3 Key Highlights (YoY)
Operating profit rose 20% to Rs 6,704.7 crore, against an estimate of Rs 6,300 crore.
Margin reported at 35.2% against 30.5%.
Cigarette segment revenue rose 16.2% to Rs 8,085.72 crore, as the business continues to counter illicit trade.
Revenue from the remaining FMCG business rose 18.3% to Rs 4,848.95 crore, aided by price hikes.
Hotel revenue jumped 49.19% to Rs 739.32 crore as travel demand surged.
Agri-business revenue fell 35.9% to Rs 3,305.21 crore, impacted by restrictions imposed on wheat and rice exports.
Paperboards, paper, and packaging segment revenue increased 12.6% to Rs 2,305.54 crore.
The FMCG businesses witnessed "strong growth" across channels and markets, both urban and rural, driven by ramp up in outlet coverage, enhanced penetration and superior last mile execution, the company said in a statement.
Input costs, according to the company, remained elevated even as some commodities witnessed sequential moderation in prices.
The company said it drove improvement in profitability through multi-pronged interventions such as strategic cost management, judicious pricing actions, premiumisation, fiscal incentives, leveraging digital, supply chain agility, and optimising channel assortments.
Potential risks arising from the anticipated slowdown in the global economy and continuing geopolitical tensions remain key monitorables, it said.
The board has approved an interim dividend of Rs 6 per share for the current financial year.
Shares of ITC closed 0.5% higher on Friday before the results were declared, compared with a 1.35% gain for the Nifty 50.
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