Last Updated on October 23, 2023 by BFSLTeam BFSLTeam
On October 19, 2023: ITC Limited (BSE, NSE: ITC ) announced its Q2 FY 2023-24 financial results amid healthy growth in Gross Revenue up by 8.9%, EBITDA up by 9.5%, and PAT increased by 10.3%. The company has significantly displayed growth in segments, especially in the FMCG segment, and looks ahead with positive prospects.
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ITC Q2 Results Highlights
- With Gross Revenue up by 8.9% (excl. Exports of wheat and rice), and PAT up by 10.3%, ITC Limited announced positive results, especially in the segment of FMCG. The Segment Revenue is on the rise by 8.3% YoY and the 2-year CAGR is up by 14.5%.
- The relevant products driving the company’s growth include spices, personal washes, atta, and agarbatti products despite a somewhat subdued consumer market demand.
- The company has shown resilient results for the segment of cigarettes with Net Segment Revenue in this area up by 8.5% YoY and Segment PBIT high by 8.0% YoY.
- Known for the success of its hotel business, ITC Limited has excelled in Q2 in this area of business too, with a stellar record high in Segment Revenue of 21%, and the PBIT up by 50% YoY.
- Notably, the Agri Segment has also shown substantial growth in the second quarter of FY2023-24, with Segment Revenue increased by 26.4% YoY (excluding exports of rice and wheat). This rise has largely been driven by Value Added Agri Products and Leaf Tobacco. The Segment PBIT is up at a level of 3.3% YoY (2-yr CAGR at +9.7%).
- The performance in the Segment of Paper, Paperboards, and Packaging was somewhat muted in Q2, mainly due to the impact of Chinese supplies and low demand from export markets. Domestic demand was low as well. However, strategic innovations (in-house pulp, HPRB, VAP, etc.) and integrated business models have gone a long way to mitigate margin pressure.
Additional Read: Q2 Results Dashboard
ITC Limited Press Release Commentary
In the Press Release related to ITC Limited’s Q2 Result, the commentary on the report highlighted some points mentioned below:
- With the global economy in the throes of a slowdown of immense proportions, along with growth in Europe and China predicted to be lower than previous estimates, India maintains its position in a somewhat positive spotlight.
- While other economies, like those of China and Europe, face some structural defeat, India is in a better place with methods for moderating inflation, vigorous tax collections, and an upswing in credit growth.
- In what can only be described as a challenging economic ecosystem, and a relatively heightened base in a few operating segments, ITC Limited has remained robust in Q2.
- The company’s health in weak economic conditions can be mainly attributed to its focus on customers, its excellence in execution, and agility, and its fast-paced digital adoption.
Additional Read: ITC Ltd Share Price
ITC Q2 Results – A Mixed Bag, but a Good Show
The conglomerate that manufactures everything from tobacco to hotels, based in Kolkata, West Bengal, India, has reported a rise in profit for Q2 2023-24, compared with the profit of the last FY2022-23. Revenue is also up on a YoY basis. Still, although this is the case, the company has performed below many estimates, largely due to its paper business being affected by weak performance standards. However, the long-term outlook appears healthy for the company as it has registered a decent enough growth spread over most of its Segments. The company, commenting on the best-ever quarterly performance for its hotel business (Segment Revenue up by 21%), stated its sound growth in other sectors like FMCG.
ITC Q2 Results Highs
In light of the overall sluggish economy, ITC Limited continues to shine a light on success with its overall growth in the hotel segment at an all-time high for Q2. From achievements that span the hosting of the latest G20 Summit (with accolades in exemplary service) to a sound pipeline of management contracts (in Welcomhotel, Mementos, Fortune, Storii, and WelcomHeritage brands), the hotel segment has witnessed healthy growth in ARRs spread across properties of the conglomerate. With phased commencements over the subsequent quarters, ITC Limited’s hotel suite may be set to conquer the hotel industry.
Something to note about the second quarter is the Scheme of Demerger (approved by the Board in August 2023) is set to progress on schedule.
Q2 FY2023-24 – Key Financial Information
The table shows the results of Q2 in a nutshell:
| Metrics (in ₹ Crore except where indicated in %) | Q2 FY2023-24 | Q2 FY2022-23 | YoY Growth % |
| Gross Revenue | 17,549 | 16,971 | 3.4% (+8.9% YoY excl. Rice & Wheat Exports) |
| Net Revenue | 16,357 | 15,976 | 2.4% |
| EBITDA | 6,042 | 5,864 | 3.0% |
| PBT | 6,514 | 5,939 | 9.7% |
| PAT | 4,927 | 4,466 | 10.3% |
Q2 FY2023-24 – Revenue By Segment
The table below shows the Revenue earned by ITC Limited for its segments on a standalone basis:
| Segment Revenue Metrics (in ₹ Crore except where indicated in %) | Q2 FY2023-24 | Q2 FY2022-23 | YoY Growth % |
| FMCG (Total Revenue incl. cigarettes) | 12949 | 11839 | 9.4% |
| Hotels | 649 | 536 | 21.2% |
| Agri Segment | 3,931 | 3,997 | -1.7% (excl. Wheat & Rice Exports) |
| Paper Segment | 2,070 | 2,288 | -9.5% |
The Gross revenue from the sale of products and services was at ₹17549 Crore for Q2 2023-24, compared to Q2 FY2022-23 when Gross Revenue was at 16971. This is a 3.4% increase on a YoY basis.
About ITC Limited
ITC, one of India’s prominent private sector companies, is a diversified conglomerate with businesses that span Hotels, Fast Moving Consumer Goods, Paperboards and Packaging, Information Technology, and Agri segments. The company, acknowledged as one of India’s key business corporations, was ranked as the country’s most admired company, according to a Fortune India survey, in collaboration with Hay Group.
The company is India’s top FMCG marketer and a clear market leader in the Paperboard and Packaging industry in the country. A globally recognised pioneer in farmer empowerment vide its wide-reaching Agri-Business, a predominant Indian hotel chain that is described as a trailblazer in ‘Responsible Luxury’, ITC Limited has a lot to boast about.
Over the last 10 years, ITC’s consumer goods business segments have created and built a host of vibrant world-class Indian brands, the familiar ones including Aashirvaad, Bingo!, Sunfeast, Classmate, Fiama, ITC Master Chef, etc. While many of these lead the market in their niches, others continue to make ITC a success.
Source: https://www.itcportal.com/investor/index.aspx
