ITC Q2 Profit Rises Upto 10 Pc to Rs 3,763.7 cr

An Indian cigarette-to hotels giant ITC Ltd. reported its results for the 2nd quarter ending September 30, 2021. 

It has reported a standalone profit after tax of Rs. 3,697 crore for the quarter, increasing by 14 percent from Rs 3,253 crore reported in the same quarter last year and by 23 percent from Rs. 3,013 crore in the June-21 quarter.

The diversified conglomerate had posted a net profit of Rs 3,418.7 crore during the July-September quarter of the previous fiscal, it said in a regulatory filing.

The Kolkata-based company's revenue from operations was up 12.1 percent to Rs 14,662.6 crore during the quarter under review, against Rs 13,075.1 crore in the year-ago period.

ITC in a post-earnings statement said, "The quarter witnessed broad-based recovery in sales across markets and channels. Reduction in the intensity of the pandemic along with a pick-up in the pace of vaccination led to improvement in the demand environment and consumer sentiment during the quarter."

However, unprecedented inflation in key input costs coupled with significant disruptions in global supply chains and logistics weighed on the operating environment, it added. Total expenses were at Rs 10,253 crore, up 11.9 percent in Q2/FY 2021-22, against Rs 9,164.7 core of the corresponding period.

In the July-September quarter, IT's revenue from total FMCG business was Rs 10.263.7 core, up 7.4 percent, against Rs 9,558.3 crore in the year-ago period. The cigarettes business in the second quarter of 2021-22 was up 10.5 percent to Rs 6,219.8 crore against Rs 5,627.7 crore in the year-ago period.

“The FMCG Businesses delivered resilient performance growing on a high base quarter which witnessed an exceptional surge in sales. After significant disruptions in Q1, cigarette volumes witnessed smart recovery with exit volumes at near pre-Covid levels," said ITC adding it has a faster recovery in volumes versus the first wave of the pandemic.

According to the company, exit volumes in the segment are 'near pre-Covid levels', FMCG Others - segment revenue stood at Rs 4,043.8 crore, up 2.9 percent, against Rs 3,930.6 crore in the corresponding period last fiscal.

Snacks, Confectionery, Beverages performed well as 'Discretionary/ Out-of-Home' categories recorded strong growth while staples and convenience foods witnessed"moderation on a high base of Q2 FY21 while well-above pre-Covid period.

While hygiene products witnessed marked demand volatility and moderated sequentially in line with the lower intensity of the pandemic and remained significantly above pre-pandemic levels.

ITC's FMCG-others segment of ITC consists of branded packaged foods as staples, snacks, meals, dairy and beverages, confections, apparel, education and stationery products, personal care products, safety matches, and incense sticks.

Revenue from its hotels business was up over two folds to Rs 311.04 crore during the quarter under review. It was Rs 87.73 crore in Q2/ FY 2020-21 as with easing of travel restrictions, domestic leisure segment, and staycations witnessed an uptick during the quarter.

According to ITC, there is a 'strong recovery in occupancy levels' and average room rates (ARRs) have improved. Moreover, business travel continues to gather momentum. Revenue growth is driven through sharply targeted packages catering to emerging trends and consumer needs along with focused communication campaigns."

However, its agri-business was down 7.2 percent at Rs 2,823 crore during the July-September quarter. It was Rs 3,040.9 crore in the corresponding quarter a year ago.

"Shortage in the availability of shipping containers/port congestions and inclement weather towards the end of the quarter delayed customer call-offs. Paperboards, paper, and packaging verticals reported an increase of 25.44 percent growth in revenue to Rs 1,829.72 crore as against Rs 1,458.67 crore in the same period last year," said ITC.

"Paperboards and Specialty Papers Business witnessed a revival of demand across most end-user segments," said ITC adding "Publications, Quick Service Restaurants (QSR) and wedding card segments, however, remain relatively subdued."

Its packaging and printing business performed well, driven primarily by the cartons segment, it added. Revenue from 'others' segments was at Rs 736.27 crore, up 27.03 percent in Q2/FY2021-22 as against Rs 579.59 crore of the corresponding period. ITC's other 'others' segments include Information Technology services and Branded Residences.

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