ITC Q2FY24 PAT grows 10% YoY to 4,927 cr

The company's revenue from operations stood at Rs 17,705.08 crore, marking a 3.17 percent increase from Rs 17,159.56 crore in the corresponding quarter of the previous year.

In the FMCG segment, excluding cigarettes, revenue saw an 8.3 percent YoY increase.

The Segment EBITDA margin expanded by 150 basis points YoY to reach 11 percent.

ITC attributed growth to products like atta, spices, personal wash, and agarbatti, amid a relatively subdued consumer demand environment.

In the stationery business, Classmate notebooks and pens showed strong year-on-year growth.

The cigarettes segment recorded an 8.5 percent year-on-year growth in revenue. ITC noted that it experienced sustained volume recovery due to measures taken by enforcement agencies to deter illicit trade, coupled with relative stability in taxes.

The hotels business achieved its best-ever second-quarter performance, according to the company.

Segment revenue and PBIT (profit before interest and taxes) in this sector increased by 21 percent and 50 percent respectively, compared to the previous year, albeit on a high base.

The Segment EBITDA margin also saw a 170 basis point YoY increase, reaching 30.7 percent.

This was attributed to higher RevPAR (revenue per available room), structural cost measures, and operating leverage.

"The global economy remains in the grip of a marked slowdown with growth in China and the Euro Area now expected to be lower than earlier estimates reflecting, inter alia, structural weaknesses in these economies. India remains a bright spot with buoyant tax collections, moderating inflation, credit growth uptick being some of the key positives amongst high-frequency indicators," ITC said.

While public investment remains strong, consumption demand has been relatively subdued, especially in the value segment and rural markets on the back of sub-par monsoons and persistent Food inflation which saw a sharp spike during the quarter, it added.

Green shoots of recovery are visible, with prospects of improved agri output, onset of the festive season, increase in rural wages and government spending on infrastructure auguring well for a recovery in rural markets.

ITC highlighted several crucial factors for near-term monitoring, including economic growth in China and other advanced economies, escalating geopolitical tensions, fluctuations in crude oil prices, consumer price inflation (with a particular focus on food prices), volatility in commodity prices, and agricultural output.

Despite the challenges posed by these factors, as well as a high base effect in certain operating segments, the company maintained robust growth in the quarter. This was attributed to its emphasis on customer-centric approaches, increased digital integration, impeccable execution, and adaptability, it added.