Key Business Metrics1
Gross Revenue is up +2.1%. Gross Revenue (ex-Agri Business) is up +3.9%.
Profit (before exceptional items & tax) is up +0.8%. Profit (after tax) is up +10.8%. Quarterly EPS is up +10% (year-on-year basis) to ₹4.47.
Cigarette Segment: 40% weight in gross revenue, 78.5% weight in operating profit
Consolidation on a high base after a period of sustained growth momentum:
– Gross segment revenue is up +3.6%. Net segment revenue and operating profit are up +2.3% (2-yr CAGR: 9.3% and +9.4%, respectively)
– Market position reinforced through focused product portfolio & commercial interventions (i.e. differentiated and premium offerings) and agile execution
– Sustained volume claw back from illicit trade (relative stability in taxes coupled with effective enforcement)
– 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:
– Interim Dividend of ₹6.25/share for the FY ending March 31, 2024
– FMCG (revenue is up +7.6%): margin expansion (+100bps to 11%) driven by premiumization, supply chain agility, pricing actions, digital initiatives and strategic cost management
– Agri Business segment (revenue is down -2.2%): 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. Excluding the wheat & rice exports, the agricultural revenue is up +14.2% as the strong customer relationships and agile execution in Leaf Tobacco & Value Added Agri products continue to drive growth in these categories.
– Mysuru factory (to manufacture and export of nicotine & nicotine derivative products conforming to US & EU pharma standards) is expected to commence exports in the current quarter.
– Paperboard, Paper & Packaging (revenue is down -9.7%): 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 Q3 2023.
References:
