ITC Ltd reported an overall 30% rise in consolidated net profit for Q1 FY22 at Rs 3,343 crore over the last financial year (Q1 FY21). However, the consolidated net profit fell 12% on a q-o-q basis from Rs 3,816 crore on account of operations being hit by the second wave of coronavirus.
While the company’s revenue grew by 36% from Rs 10,478 crore to Rs 14,240 crore y-o-y, the revenue declined from Rs 15,404 crore recorded in the previous quarter.
Revenue jumped by 34% from Rs 4,330 crore to Rs 5,802 crore y-o-y. However, the second wave slump pushed the FMCG-Cigarettes business down on sequentially from Rs 6,508 crore recorded in the previous quarter. EBIT margin for the cigarette business climbed 37% y-o-y.
The restricted hours of convenience store operations and localized lockdowns impacted the cigarette sales with Southern and metro markets taking the major hit.
ITC’s non-cigarette FMCG business also grew 10% y-o-y from Rs 3,378 crore to Rs 3,731 crore while growing from Rs 3,694 crore over the last quarter as well. EBITDA margin for the non-cigarette business hiked by 16%.
ITC Ltd clocked a 3 times increase in their revenue from the hotel business. Revenue tripled in Q1 FY22 to Rs 134 crore compared to Rs 24 crore in the year-ago period when India was hit by the first wave of Covid-19 and nationwide lockdowns. The revenue however declined q-o-q from Rs 302 crore reported in the March quarter just before the onset of a ghastly second wave.
The company’s agribusiness grew by 9% y-o-y from Rs 3,764 crore to Rs 4,109 crore. ITC’s Paperboards, Paper & Packaging business also reported a whopping 54% jump in its revenue this quarter. ITC’s miscellaneous business also soared from Rs 556 crore y-o-y and Rs 641 crore q-o-q to Rs 680 crore in Q1 FY22.
The company reports strong sequential recovery in its cigarettes segment. The segment is witnessing a week-on-week recovery in revenue with markets returning to normalcy since mid-June 2021.
The hotel business is also showing signs of recovery with the easing of restrictions led by staycations, workstations, and leisure holidays.
Education & Stationery Products Business remains impacted due to the continued closure of educational institutions.
There has been robust growth in e-commerce sales with the ‘ITC e‐Store’ receiving an excellent response. Rural markets however have shown slower growth amid a sharp escalation in input costs in FMCG products.
While the company’s operations were hit in Q1 FY22 due to the second wave of coronavirus ravaging India, the company seems to ride big on its tobacco business. However, the conglomerate’s net profit missed the market estimate.
Although the recovery in most businesses is strong, the country’s second-largest FMCG company did not see the effect of panic buying in the March-June quarter. Analysts are hopeful of the company’s cigarette volumes reaching nearly pre-covid levels.