Diversified conglomerate, ITC on Thursday reported a sharp surge in net profit for the January-March quarter, driven by a one-time exceptional gain linked to the demerger of its hotels business. The Kolkata-based firm posted a consolidated net profit of Rs 19,727.4 crore, up 285% year-on-year. However, the figure included a one-time gain of Rs 15,179 crore from discontinued operations, primarily due to the separation of ITC Hotels.
Excluding the exceptional item, the adjusted net profit rose a modest 0.8% to Rs 4,875 crore, falling short of Bloomberg estimate of Rs 4,935 crore. The muted earnings performance reflects subdued consumption trends and steep input cost inflation, particularly in the fast-moving consumer goods (FMCG) segment.
Consolidated revenue from operations for the quarter came in at Rs 20,376.4 crore, a 9% increase from a year earlier, and ahead of the Bloomberg consensus estimate of Rs 18,142 crore. Ebitda at Rs 6,519 crore was up 3.4% YoY, while margin stood at 32% compared to 34% during the same period last year.
“The cumulative impact of inflationary pressures on household savings, along with muted wage growth, continued to weigh on consumption expenditure, particularly in urban markets,” the company noted. It added that recovery in rural demand, aided by a favourable monsoon and budgetary tax cuts, is likely to support a rebound in consumption going forward.
The company’s flagship cigarette business posted a 6% year-on-year revenue growth to Rs 8,399.6 crore, while profit rose 4%. ITC said premium offerings continued to perform well, offsetting the rise in leaf tobacco costs through better product mix and cost control measures.
The FMCG segment, excluding cigarettes, grew 3.7% in revenue to Rs 5,494.6 crore, driven by categories such as atta, spices, frozen snacks, and premium personal care. However, Ebitda for the FMCG business declined sharply by 20.5% due to steep input price hikes in edible oil, wheat, cocoa, and potatoes.
The agri business witnessed robust growth, with revenue up 18% to Rs 3,649 crore and profit rising 26% to Rs 255 crore. The company attributed the performance partly to exports of nicotine and its derivatives from its new Mysore facility.
The Paperboards, Paper & Packaging segment grew 5.5% in revenue to Rs 2,188 crore but posted a 31% drop in profit, citing cheap imports, subdued domestic demand, and soaring wood prices due to cyclonic disruptions.
ITC announced a final dividend of Rs 7.85 per share for FY25, taking the total payout for the year to Rs 14.35 per share.
On Thursday, ITC shares closed down 1.58% at Rs 426.10 on the BSE. The results came after market hours.