ITC Q3 Results: Profit Rises Marginally, Margin Contracts
The cigarettes segment experienced a strong growth of 8% in net revenue, driven by increased volume.
ITC Ltd. posted a marginal rise of 1.18% in the standalone net profit in the December quarter of the current financial year.
The company posted a profit of Rs 5,638.3 crore as compared to Rs 5,572.1 crore in the same period last fiscal, according to an exchange filing on Thursday. Revenue grew 8.45% to Rs 18,290.2 crore, compared to Rs 16,864.3 crore in the year-ago period.
ITC Q3 FY25 Highlights (Standalone, YoY)
Revenue up 8.45% to Rs 18,290.2 crore versus Rs 16,864.3 crore.
Ebitda up 1.55% to Rs 5,828.4 crore versus Rs 5,739.4 crore.
Margin narrows 216 basis points to 31.86% versus 34.03%.
Net profit up 1.18% to Rs 5,638.3 crore versus Rs 5,572.1 crore.
Q3 saw an exceptional item of Rs 12.18 crore.
Tax expense of Rs 72.43 crore from discontinued operations — demerger of Hotel business
The company also declared an interim dividend of Rs 6.5 per share.
Cigarettes
The cigarettes segment experienced a strong growth of 8% in net revenue, driven by increased volume. The premium segment and new innovations continued to gain robust traction. Analyst estimates suggested a cigarette volume growth of 5% in the quarter.
However, the segment faced sharp cost escalation in leaf tobacco and restructured trade marketing spends for sharper last-mile execution. The higher leaf tobacco cost was partially mitigated via product mix enrichment, according to Informist.
FMCG Others
Revenue for the FMCG Others segment was up 4% YoY and 5.2% YoY, excluding notebooks, amid muted demand conditions. The growth was driven by wheat flour, spices, snacks, frozen snacks, dairy, premium personal wash, homecare and incense sticks.
The notebooks category was impacted by a high base effect and opportunistic play by local brands due to a sharp drop in paper prices. Despite severe inflationary pressures, sustained competitive marketing investments supported growth and market standing. The segment Ebitda, excluding notebooks, was down 17%.
Agri Business
The growth in the agri-business segment was driven by leaf and value-added agri products like coffee and spices.
Paperboards, Paper, Packaging
This segment's performance reflected the impact of low-priced Chinese and Indonesian supplies in global markets (including India), muted domestic demand and subdued realisations. Subdued realisations combined with a steep increase in domestic wood costs continued to weigh on margins, with the segment Ebitda down 21%.
Hotels Business Standalone
The hotels business reported revenue of Rs 922 crore, up 15%. The business was demerged into ITC Hotels Ltd. with effect from Jan. 1, and ITCHL shares were listed on stock exchanges on Jan. 29.
The segment showed good performance on an elevated base with an Ebitda margin of 40%, expanding 450 basis points. Growth was driven by the retail, wedding and food & beverage segments.
During the quarter, five properties with 330 keys were opened and ITC Ratnadipa, Colombo, continued to garner widespread appreciation, achieving cash break even at the operating profit level.
Shares of ITC closed 1.57% lower at Rs 441.10 apiece on the National Stock Exchange before the announcement of the results, compared to a 0.39% decline in the benchmark Nifty.
