ITC Ltd Q4FY23 standalone PAT grows 21% to Rs 5,086.86 cr

In the fourth quarter, ITC witnessed a 16.1% year-on-year increase in gross revenue (excluding wheat exports), while EBITDA (earnings before interest, taxes, depreciation, and amortization) grew by 18.9% YoY.

The EBITDA margin stood at 36.1%, showing a significant improvement of 385 basis points. When compared to the base quarter, the reported gross revenue increased by 6.1%, with the previous year's quarter including wheat exports that were banned during the current year.

For the full year (FY23), ITC achieved a 17.6% increase in gross revenue and a 26.5% increase in EBITDA. The EBITDA margin improved by 240 basis points to 34.5%. Its PAT during the period stood at Rs 18,753.31 crore, up 24.54% compared to Rs 15057.83 crore in FY22.

In a notable achievement, 12 hotel properties of ITC have received LEED Zero Carbon certification, making them the first 12 in the world to do so, the company said. Further, two hotel properties have received LEED Zero Water certification, making them the first 2 in the world. These certifications highlight ITC's commitment to sustainability and environmental responsibility.

ITC has maintained its 'AA' rating by MSCI-ESG, which is the highest rating among global tobacco majors.

The company has also been included in the Dow Jones Sustainability Emerging Markets Index. Furthermore, ITC has received a 'Leadership Level' score of 'A-' for both Climate Change and Water Security by CDP, further affirming its sustainability efforts.

The FMCG - Others segment experienced strong growth, with segment revenue in the fourth quarter increasing by 19.4% YoY, reaching approximately 1.6 times that of the fourth quarter of FY20.

The growth was driven by various product categories such as staples, biscuits, snacks, noodles, dairy, beverages, soaps, fragrances, and agarbatti.

The education and stationery products business also showed robust traction. The segment's EBITDA for the quarter grew by 76% YoY, attributed to several strategic measures including premiumization, supply chain agility, pricing actions, digital initiatives, cost management, and fiscal incentives.

ITC's cigarette segment demonstrated sustained volume recovery from illicit trade, supported by actions taken by enforcement agencies and relative stability in taxes. The segment's net revenue increased by 13.7% YoY in the fourth quarter, with segment PBIT (Profit Before Interest and Taxes) growing by 14.0% YoY.

The hotels business of ITC delivered a stellar performance in the fourth quarter. The segment revenue reached approximately twice that of the fourth quarter of FY22 and about 1.7 times that of the fourth quarter of FY20.

The revenue per available room (RevPAR) exceeded pre-pandemic levels, and the segment's EBITDA for the quarter was 2.5 times that of the fourth quarter of FY20. The EBITDA margin for the quarter stood at 34.8%, a significant improvement from 8.1% in the corresponding period of FY22 and 23.1% in the fourth quarter of FY20.

The strong performance was driven by higher RevPAR, operating leverage, and cost management initiatives.

In the Agri-Business segment, the fourth-quarter segment revenue increased by approximately 20% YoY (excluding wheat exports), with segment PBIT growing by 25.9% YoY. The growth was attributed to value-added agri products and leaf tobacco exports.

Despite the growth in value-added agri products and leaf tobacco exports, the Agri-Business segment was impacted by restrictions imposed on wheat and rice exports, leading to a decline in segment revenue.

The Paperboards, Paper, and Packaging segment faced challenges due to softening pulp prices, muted demand in global markets, and a relatively higher base, which affected YoY segment revenue growth. However, the Fine Paper segment remained buoyant.

In the fourth quarter, the segment revenue for Paperboards, Paper, and Packaging reached Rs 2,221 crore, with a three-year compound annual growth rate (CAGR) of 15%. The segment's PBIT for the quarter stood at INR 445 crore, with a three-year CAGR of 16%.

Furthermore, the financial results included exceptional items representing proceeds received in the partial settlement of an insurance claim related to leaf tobacco stocks. These stocks were destroyed in a fire at a third-party-owned warehouse in the previous year.