ITC standalone Q4FY24 PAT drops slightly toRs 5,020.2 cr; company declares final dividend

ITC recommended a final dividend of Rs 7.50 per ordinary share for the financial year ending March 31, 2024. Including the interim dividend of Rs 6.25 per share declared on January 29, 2024, the total dividend for the year will be Rs 13.75 per ordinary share.

Earnings before interest, tax, depreciation, and amortization (EBITDA) for the quarter stood at Rs 6,162.6 crore, a decline of 0.8 percent. EBITDA margins fell by 70 basis points year-on-year to 37.2 percent.

The FMCG-Others segment performed well despite weak demand and increased competition from local players. The company achieved strong profit growth through premiumization, cost management, and strategic pricing. Segment revenue grew by 9.6 percent, with EBITDA increasing by 19.7 percent to Rs 2,338.50 crore, and EBITDA margins improved to 11.2 percent, up 94 basis points.

Digital strategies have enhanced consumer insights, engagement, and brand loyalty for ITC Ltd. The company's product portfolio was bolstered with over 100 new launches focusing on Health & Nutrition, Hygiene, and Convenience. Market coverage has doubled compared to pre-pandemic levels, showing significant growth in both rural areas and digital sales.

The UNNATI eB2B platform now reaches nearly 7 lakh outlets, with digitally enabled sales making up 31 percent of total sales. The ITC e-Store and other D2C platforms operate in over 24,000 pin codes, further improving consumer insights and commerce. The FMCG export footprint has expanded to over 70 countries, supported by the PLI scheme for categories such as Biscuits, Cakes, Snacks, Dairy, and Ready-to-Eat foods.

The Branded Packaged Foods Businesses at ITC are focused on meeting consumer needs through innovations in health, nutrition, wellness, immunity, and convenience. The company's mission is to "Help India Eat Better" by fostering a sustainable ecosystem with healthier, affordable, and accessible products.

ITC's 'Mission Millets' initiative promotes a millet-based product portfolio, sustainable farming, and consumer awareness. Under this initiative, products such as 'Gluten Free Flour,' 'Multi-Millet Batter Mix,' and 'Ragi Flour' are being expanded under popular brands like 'Aashirvaad' and 'Sunfeast.'

Key Highlights of the Branded Packaged Foods Businesses

Staples Business

Aashirvaad: Strengthened market position with robust growth. Value-added products like Multigrain, Select, and Sugar Release Control Atta saw healthy growth, augmented by the launch of 'Atta with Millets'.

Millet and Organic Products: Strong growth for Gluten Free Flour, Ragi Flour, Multi-Millet Batter Mix, Organic Atta, Organic Dals, Aashirvaad Vermicelli, and Aashirvaad Rava. New launches include Organic Rajma and Organic Kabuli Chana.

Aashirvaad Besan: Extended across markets, receiving excellent consumer feedback.

Aashirvaad Salt: Robust growth with the launch of Himalayan Pink Salt catering to health-conscious consumers.

Spices: 'Sunrise' brand strengthened in West Bengal, Northeast, and Bihar. Aashirvaad Spices expanded in emerging channels and core markets.

Biscuits and Snacks

Sunfeast Biscuits: Resilient performance with launches like 'Bounce Day & Night' and 'All Rounder Sweet and Salt'.

Bingo! Snacks: Innovations include millet-based 'Bingo! Tedhe Medhe Chatpata Twist', 'Bingo! Nachos Chilli Limon', 'Bingo! Tedhe Medhe Cream and Onion', and 'Bingo! 2X Hot and Spicy Korean-Style chips'. Bingo! Tedhe Medhe Namkeens expanded across markets.

YiPPee! Noodles: Strengthened market position with millet-based noodles and 'Wow Masala' noodles. Promoted sustainability through plastic waste management initiatives.

Dairy & Beverages

Aashirvaad Svasti: Gained traction with products like pouch milk, curd, lassi, and paneer in Bihar, West Bengal, and Jharkhand. Launched 'Litchi' flavored Lassi, Indian desserts under 'Aashirvaad Mithaas', Paneer Slice, and organic 'Aashirvaad Svasti Ghee'.

Beverages: Impacted by muted demand due to erratic weather. Continued investment in 'B Natural' with launches like Tender Coconut Water and Masala Range.

Dairy Beverages: Leveraged 'Sunfeast' and 'Dark Fantasy' brands for milk-based smoothies with fruit chunks and seeds.

Frozen Foods

ITC Master Chef and Farmland: Accelerated growth with innovative products like 'ITC Master Chef Paneer Pakoda' and 'ITC Master Chef Crispy Onion Rings'. New launches are being scaled up in target markets.

The company has invested in 11 Integrated Consumer Goods Manufacturing and Logistics facilities to improve product freshness, market agility, and cost efficiency. Strategic cost management initiatives, such as supply chain optimization and automation, have been implemented to counter input cost pressures and support new initiatives.

Personal Care Products Business

Brand Building and Innovation

Purposeful Brands: Focused on building purposeful brands, launching innovative products, and expanding into emerging channels, leading to strong growth in the premium portfolio.

Personal Wash Segment

Fiama: Achieved significant growth with new products like 'Fiama Sandalwood Oil & Patchouli' and 'Fiama Men’s Charcoal'. Partnered with Filmfare to raise mental health awareness.

Vivel: Continued growth with a focus on women’s empowerment through a collaboration with the Azad Foundation.

Fragrances

Engage: Launched a premium EDP range, including a 'gender neutral' variant called 'One Soul', and performed well despite intense competition.

Home Care

Nimyle: Experienced strong growth in modern trade and e-commerce. Maintained market leadership with new packaging, better penetration, and a collaboration with 'Pet Fed' to promote eco-friendly floor cleaners.

Skincare

Dermafique: Expanded its product range with new items such as 'Hydra Soft Nourishing Body Wash' and 'Aqua Cloud Shower Mousse'. Utilized AI for personalized skin analysis.

Manufacturing and Supply Chain

New Facility: A new manufacturing unit in Uluberia, West Bengal, is set to enhance supply chain agility and reduce costs.

Stationery

The Education and Stationery Products industry experienced robust growth driven by increased enrolment and literacy rates, despite heightened competition from regional players. The business upheld its leadership position through innovative product launches and premium offerings. Notably, 'Classmate Interaktiv' notebooks and 'Classmate Pulse' spirals garnered significant consumer interest. 'Paperkraft' expanded its presence with new notebook designs, while the Writing Instruments portfolio delivered strong performance.

Additionally, the business bolstered its e-commerce presence and enhanced manufacturing capacity at its Vijayawada facility to support growth and reduce costs.

Incense Sticks

In the Incense Sticks (Agarbatti) category, strong growth was observed, with the 'Mangaldeep' brand introducing new products like the 'Scent' sub-brand, featuring unique and long-lasting fragrances. Mangaldeep refreshed its Floral and Sandal ranges, emphasizing devotion and wellbeing, and collaborated with 150 visually impaired evaluators to create superior fragrances.

In Safety Matches, 'Homelites' solidified its market leadership with its distinctive positioning of stronger, longer, and karborised sticks.

FMCG – Cigarettes

After a period of sustained growth, the Business experienced volume consolidation due to subdued demand and high levels of illicit trade. Premium offerings performed well, and increased costs from leaf tobacco prices and taxes were managed through an improved product mix, cost management, and pricing strategies. Trade marketing was restructured for better execution.

The Business combated illicit trade by innovating and expanding its premium product portfolio with launches like ‘Classic Alphatec’, ‘Classic Icon’, and ‘Gold Flake Indie Mint’.

This resulted in sequential growth in Net Segment Revenue and Segment PBIT of 5.2 percent and 4.1 percent, respectively. Manufacturing facilities were modernized with technologies such as Industry 4.0 and Data Sciences to enhance productivity and product excellence.

India's high taxes on legal cigarettes have increased illicit trade, making it the third-largest illicit cigarette market globally. This has led to revenue loss, poor quality products, and a negative impact on tobacco farmers. Recent tax stability has helped the legal industry regain some volume, boosting demand for Indian tobacco and reducing tax losses. The Company advocates for balanced, evidence-based regulations and taxation to support the legal cigarette market while considering India's unique tobacco consumption patterns.

ITC Hotels

The Hotels Segment achieved record highs in revenue and profits, driven by strong RevPar growth from retail, MICE, and marquee events. Segment Revenue reached Rs. 2989.50 crores and Segment EBITDA was Rs. 1049.88 crores, growing by 15.6 percent and 26.2 percent respectively, with an EBITDA margin of 35.1%. Renovations, including the reopening of Welcomhotel Chennai, capitalized on high season opportunities. The first international property, ITC Ratnadipa in Colombo, Sri Lanka, opened in April 2024, enhancing the luxury hospitality market. 

Digital investments enhanced guest experience and operational efficiency through the ITC Hotels App, offering services like food delivery, reservations, room automation, and loyalty benefits. The 'asset-right' strategy focused on management contracts, with 24 out of 25 new hotels in the last 24 months being managed properties. The business sees growing interest from property owners for partnerships, building a strong pipeline of management contracts. 

ITC Hotels maintained its leadership in green hoteliering and sustainability, with 23 USGBC LEED Platinum certified properties. Additionally, 12 hotels received LEED Zero Carbon Certification, and 4 hotels received LEED Zero Water Certification, being the first in the world to achieve this.

Paperboards, Paper and Packaging

The Paperboards, Paper & Packaging Segment encountered challenges stemming from weak domestic and export demand, low net realizations, competition from inexpensive Chinese supplies, escalating domestic wood costs, and the impact of a high base effect.

Nevertheless, the Business fortified its leadership position in the Value-Added Paperboard (VAP) segment by prioritizing innovations, offering tailored solutions for end-use industries, and engaging extensively with end-users.

The structural advantages of its integrated business model, coupled with Industry 4.0 initiatives, strategic investments in a High Pressure Recovery Boiler, and proactive capacity expansion in Value Added Paperboards, contributed to partially alleviating margin pressures.