Key Business Metrics: Q4 20241
Gross Revenue is up +2% driven by resilient performance in Cigarettes (+7.7%) and FMCG Others (+7.2%). Gross Revenue (ex-Agri Business) is up +6.0%.
Profit (before tax) is down -1%. Profit (after tax) is down -1.3%.
Q4 2024 EPS (diluted): ₹4.02 (down -1.5% from ₹4.08)
Key Business Metrics: FY24
Gross Revenue is flat as the resilient performance in Cigarettes (+8.5%) and FMCG Others (+9.6%) is fully washed out by the weakness in Agri Business and Paperboard, Paper & Packaging. Gross Revenue (ex-Agri Business) is up +6.8%.
Profit (before tax) is up +6.3%. Profit (after tax) is up +8.9%.
FY24 EPS (diluted): ₹16.35 (up +8.2% from ₹15.11); 12-m trailing P/E: 27
FY24 Segment Highlights
Cigarette Segment: (39% weight in gross revenue, 79% weight in operating profit)
Consolidation on a high base after a period of sustained growth momentum:
– Gross segment revenue is up +8.5%. Net segment revenue and operating profit are up +7.1% and 6.5%, respectively (2-yr CAGR: +13.5% and +13.3%, respectively)
– Sequential slow down in growth amidst subdued demand conditions in the overall consumption space (cigarette volume growth estimated as 2%-3%)
– Market position reinforced through focused product portfolio & commercial interventions (i.e. differentiated and premium offerings) and agile execution
– Sharp escalation in input costs (leaf & other input materials) and tax increases are largely mitigated through improved mix, strategic cost management and calibrated pricing
Other Segments:
– FMCG (revenue is up +9.6%, operating profit is up +29.4%): margin expansion (+100bps to 11.2%) driven by premiumization, supply chain agility, pricing actions, digital initiatives and strategic cost management
– Agri Business segment (revenue is down -13.1%, operating profit is down -5.5%): negatively impacted by trade restrictions imposed by the Government on agricultural commodities (stock limits on wheat, ban on non-basmati rice exports and export duty on parboiled rice) as the geopolitical tensions & climate emergencies raise concerns on food security. Strong customer relationships and agile execution in Leaf Tobacco & Value Added Agri products continue to drive growth in these categories. Steep increase in green leaf prices exert pressure on margins.
– Mysuru factory (to manufacture and export of nicotine & nicotine derivative products conforming to US & EU pharma standards): customer trials underway & export shipments are expected to be scaled up progressively
– Paperboard, Paper & Packaging (revenue is down -8.1%, operating profit is down -39.9%): negatively impacted by low-priced Chinese supplies in global markets, muted domestic demand and surge in wood cost as well as a high base in FY23
Dividend:
Final FY24 Dividend: ₹7.50/share. Total FY24 dividend: ₹13.75/share (including the interim dividend paid of ₹6.25/share paid on February 27, 2024). Total yield: 3.1% (based on the last closing price of ₹441.35)
Total FY23 dividend was: ₹15.5/share (₹12.75 ordinary + ₹2.75 special)
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