ITC’s Q3 results: Net profit zooms 21% to Rs 5,031 crore, comfortably beating estimates Declares Interim dividend
ITC’s third quarter profit has significantly beaten estimates. According to an average of estimates of brokerages polled by Moneycontrol, the company’s bottom line was expected to come in at Rs 4614 crore.
ITC’s standalone net profit for the quarter ended December 31, 2020 rose 21 percent to Rs 5031 crore. In the same quarter last year, the company had posted a net profit of Rs 4156 crore.
The company’s profit margin significantly exceeded estimates. According to an average of estimates of brokerages polled by Moneycontrol, the company’s bottom line was expected to come in at Rs 4614 crore.
Revenue from operations excluding excise duty grew 23 percent year-over-year to Rs 162257 crore against Rs 15862 crore in the previous year. EBITDA (earnings before interest, taxes, depreciation, and amortization) grew 22 percent year-over-year at Rs 62232 crore, and EBITDA margins improved over 600 basis points to 384 percent.
One basis point is equal to 0.01% or one-hundredth of a percent.
The company has also declared an interim dividend of Rs 6 per share for the financial year ending on March 31 2023, along with the Q3 numbers.
Cigarette revenue increased by 167 percent year-over-year to Rs 7288 crore, while FMCG revenue grew by 18 percent to Rs 4841 crore.
Hotels business revenue increased by 50 percent to Rs 712 crore as travel rebounded. The segments operating margin came in at 315 percent versus 247 percent in the year-ago period, driven by higher RevPAR operating leverage and structural cost interventions.
RevPAR is a metric used to measure a hotel’s revenue generated per available room. It is currently ahead of prepandemic levels, due to an increase in retail packages, leisure, and weddings.
Agricultural revenue for the year fell 37 percent from the previous year to Rs 3123 crore due to restrictions placed on wheat and rice exports by the government. Paperboard and paper revenue, however, grew by 127 percent during the same time period to Rs 2305 crore.
The company’s earnings press release stated that stability in taxes on cigarettes, backed by deterrent actions by enforcement agencies, enable continued volume recovery from illicit trade. Analysts see cigarette volume growth at 14 percent YoY, while Street expectation was of 10 percent.
The FMCG businesses saw strong growth in both urban and rural areas, driven by increased outlet coverage, enhanced penetration, and superior last mile execution, according to the media release. Margin for the segment improved 90 basis points YoY to 10 percent for the quarter.
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