ITC Limited Quarterly Results Q2 FY22

A diversified private sector company operating in FMCG, Hotels and Packaging industries, and India’s largest cigarette manufacturer – ITC Ltd. – posted its earnings report for the second quarter of the Financial Year 2022 on October 27. The company reported a 10% year on year (YoY) increase in its consolidated net profit in the September quarter. The company’s net profit increased to Rs 3,714 crore from Rs 3,366 crore over the last year.

After severe disruptions due to the second wave of COVID-19 in the first quarter for FY22, ITC’s performance across all segments picked pace. Sales and revenue saw faster recovery with the FMCG revenue up 23% YoY over Q2 FY20 at Rs 10,263 crore. The company reported strong growth in its agri business while the revenue from the hotel segment is back to Q4 FY21 levels.

The company’s majority revenue comes from its cigarette business. The revenue from the ITC cigarette segment increased from Rs 5,627 crore to Rs 6,219 crore YoY indicating a steady recovery. The net revenue from the cigarette business in the quarter under review is up by 10.3% YoY on the back of broad-based recovery witnessed across markets during the quarter.

Hits

• ? ? ? Net profit increased by 13.7% YoY from Rs 3,276 crore to Rs 3,714 crore.
• ? ? ? Gross revenue up by 11.1% YoY from Rs 13,075 crore to Rs 14,662 crore in this quarter.
• ? ? ? Earnings Per Share for the quarter was Rs. 3
• ? ? ? Sharp incline in the revenue from Hotel business; revenue up from Rs 87 crore in Q1 FY22 to Rs 311 crore in this quarter.
• ? ? ? YoY revenue from Operations up from Rs 13,147 crore to Rs 14,844 crore
• ? ? ? Total income up from Rs 13,730 crore to Rs 15,313 crore.

Misses

• ? ? ? Non-cigarette FMCG business largely remained flat.
• ? ? ? PBT fell marginally to Rs 275 crore against Rs 282 crore in the year ago period.
• ? ? ? Agri business took a hit on a sequential basis from Rs 4,109 crore in Q1 FY22 to Rs 2,923 crore in the September quarter.
• ? ? ? Marginal increase in revenue from operations on a sequential basis.
• ? ? ? Sharp spike in raw material prices

Segment-wise revenue

• ? ? ? FMCG (Cigarettes): QoQ revenue up from Rs 5,802 crore to Rs 6,219 crore
• ? ? ? FMCG (Others): QoQ revenue up from Rs 133 crore to Rs 311 crore
• ? ? ? Hotels: QoQ revenue declines from Rs 4,109 crore to Rs 2,823 crore
• ? ? ? Paperboards, paper and packaging: QoQ revenue up from Rs 1,582 crore to Rs 1,829 crore
• ? ? ? Others: QoQ revenue up from Rs 68-0 crore to Rs 736 crore.

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Research Analyst: Bavadharini KS