ITC: Q2 2024 Results

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Key Business Metrics1

Gross revenue is up +3.4%. Gross revenue (excluding wheat & rice exports) is up +8.9%.

Wheat & Rice exports: Geopolitical tensions & climate emergencies raise concerns on food security and trade restrictions are imposed by the Government (stock limits on wheat, ban on non-basmati rice exports and export duty on parboiled rice)

Profit (after tax) is up +10.3%. Profit (before exceptional items & tax) is up +9.7%. This is broadly in-line with pre-announcement expectations of +10% profit growth

Cigarette Segment: 39% weight in gross revenue, 79.5% weight in operating profit

Resilient performance in the cigarette segment:

– net segment revenue up +8.5% (up +10.1% including excise) and operating profit up +8.0%: driven by sustained volume gain from illicit trade (relative stability in taxes coupled with effective enforcement) and focused product portfolio & commercial interventions

– sharp cost increases (leaf tobacco & certain other inputs) and taxes increases are largely mitigated through improved mix, strategic cost management and calibrated pricing

Other Highlights:
– FMCG: margin expansion (+150bps to 11%) driven by premiumization, supply chain agility, pricing actions, digital initiatives and strategic cost management

– Mysuru factory (to manufacture and export of nicotine & nicotine derivative products conforming to US & EU pharma standards) is expected to commence exports over the next few months

– Paperboard, Paper & Packaging: negatively affected by the low-priced Chinese supplies and declining demand in China & EU markets as well as the sharp reduction in global pulp prices.

References:

  1. https://www.itcportal.com/about-itc/shareholder-value/key-financials/quarterly-results.aspx ↩︎

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