Beating street estimates, diversified conglomerate ITC on Thursday reported around 3.1 per cent year-on-year growth in its standalone net profit at ₹5,078.34 crore for the second quarter this fiscal, backed by a 16 per cent y-o-y jump in its gross revenue during the period.

The Kolkata-headquartered conglomerate had posted a net profit of ₹4,926.96 crore during the second quarter last fiscal.

The cigarette-to-soap maker’s gross revenue from sale for the July-September quarter of the current financial year soared to ₹20,359.95 crore from ₹17,548.75 crore for the corresponding period last year, driven by good growth in agri and hotels businesses.

The company, in a media statement, said it was a resilient performance amidst a challenging operating environment. Subdued demand conditions, unusually heavy rains in parts of the country, high food inflation and sharp escalation in certain input costs were witnessed during the quarter under review.

Total expenses during the quarter witnessed a 20.30 per cent y-o-y rise to ₹14,661.29 crore, whereas cost of materials consumed soared by 13.45 per cent y-o-y to ₹6,098.77 crore, according to a stock exchange filing.

During Q2 FY25, revenue from the cigarette business rose 6.78 per cent y-o-y to ₹8,177.27 crore, while operating profit from the segment increased by around 5 per cent y-o-y to ₹5,023.35 crore during the period. The country’s largest cigarette maker said sharp cost escalation in leaf tobacco, partly mitigated through improved mix, calibrated pricing and strategic cost management.

The non-cigarette FMCG business registered a 5.41 per cent y-o-y growth in its revenue to ₹5,577.73 crore, while the segment posted ₹441.80 crore operating profit during this period against ₹438.60 profit in the year-ago period. According to the company, incessant rains and flooding in certain parts of the country adversely impacted categories with higher salience of discretionary/out-of-home consumption.

Muted demand conditions

Inflationary headwinds were witnessed across several key inputs, in edible oil, wheat, maida, potato, and so on, during the second quarter. “Competitive intensity continues to remain high (including from local players) in certain categories such as noodles, snacks, biscuits and popular soaps,” it said, adding that the FMCG business demonstrated resilience amidst muted demand conditions, led by agile innovation, and a slew of innovative product launches.

Hotels segment revenue rose 12.05 per cent y-o-y to ₹727.65 crore during Q2 FY25, while operating profit from the segment increased 20.16 per cent y-o-y to ₹151.19 crore during the period under review.

The company’s agri business segment revenue rose 47.05 per cent y-o-y to ₹5,780.51 crore in the period, while operating profit for the segment grew 27.49 per cent y-o-y to ₹454.72 crore.

ITC’s Paperboards, Paper and Packaging segment revenue witnessed a marginal growth of 2.14 per cent y-o-y at ₹2,114.09 crore, while operating profit fell 23.22 per cent y-o-y to ₹242.47 crore during the period.

“Subdued realisation, surge in domestic wood prices and ocean freight continue to weigh on margins. Unseasonal rains adversely impact wood availability, quality and procurement price,” the company said.

Related Topics