ITC reported in-line numbers on all fronts for the quarter amid sluggish demand conditions. Revenue grew by 5.8% yoy to Rs11,502.8cr, in-line with estimates. EBITDA grew by 8.7% yoy with EBITDA margin at 39.7%, an expansion of 105bps yoy. Company reported 53.6% yoy growth in the other income and hence, PAT grew by 12.6% yoy to Rs3,173.9cr.
As per the reported numbers, Cigarette revenues grew 6.0% yoy and its EBIT grew by 8.2% yoy (145bps expansion in EBIT margin). The revenue from cigarette segment was impacted by lower than expected volume growth which came in at 3.5% yoy (against estimate of ~~6% yoy growth).
FMCG reported sales growth of 6.6% yoy to Rs3,060cr with 55.7% yoy jump in EBIT; but down 40.2% qoq. EBIT margin for the segment stood at 2.5% (up 80 bps yoy). FMCG’s revenue grew by ~8% on a comparable basis (excluding the lifestyle retailing business) led by branded packaged foods business (atta, potato chips, premium cream biscuits and noodles), personal care (liquids) and education & stationery products (notebooks). Comparable EBITDA grew by 41% yoy; company stepped up investments in brand building for the segment.
Hotels segment reported 15.0% yoy revenue growth led by recently commissioned hotels - ITC Kohenur, Hyderabad and ITC Grand Goa, Resort & Spa, Goa. While EBITDA grew by 18% yoy, EBIT decline by 21.4% yoy due to (a) slowdown in the conferences and banqueting segment and (b) additional depreciation charge pertaining to the new properties.
Company opened first phase of ITC Royal Bengal, a Luxury Collection Hotel, comprising 254 rooms along with five signature restaurants, on June 1, 2019.
Agri segment’s revenue was up 14.6% yoy with 4.3% growth in EBIT. The muted operating performance was on account of (a) lack of trading opportunities in oilseeds and pulses, (b) subdued demand for leaf tobacco in international markets, and (c) relatively steeper depreciation in currencies of competing origins.
Paperboard segment reported 12.7% yoy growth in revenue driven by strong volume growth in the value added paperboard segment and product mix enrichment. However, growth in the packaging & printing business was impacted due to sluggish demand conditions in the FMCG industry and exports. Aided by product mix enrichment, higher realisation, strategic investments in imported pulp substitution and benefits of a cost-competitive fibre chain, the segment reported EBIT growth of 11.5% yoy (EBIT margin remained flat on yoy basis).
ITC Ltd ended at Rs. 264.60, down by 3 points or 1.12% from its previous closing of Rs. 267.60 on the BSE.
The scrip opened at Rs. 268 and touched a high and low of Rs. 268 and Rs. 263.20 respectively. A total of 93,71,435 (NSE+BSE) shares were traded on the counter. The stock traded above its 200 DMA.
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