ITC Reports Q1 FY25 Results
ITC, India’s second-largest FMCG company and the world’s third-largest tobacco firm, reported a slight increase in net profit for Q1 FY25. The company’s net profit reached ₹4,917 crore, a marginal rise from ₹4,902 crore in the same quarter last year. Revenue from operations grew by 7.32% to ₹18,077.24 crore, compared to ₹16,842.93 crore in Q1 FY24. This increase in revenue aligns with analyst expectations, who had forecasted a 6-7% rise in sales.
Segment Performance
In the FMCG sector, ITC showed resilience despite subdued demand, with revenue rising 6.3% year-on-year to ₹5,491 crore. EBITDA margins improved slightly by 25 basis points to 11.3%. The cigarette division performed well, with net segment revenue growing by 7% and profit before interest and taxes (PBIT) increasing by 6.5%. ITC’s strategic focus on product innovation and combating illicit trade has bolstered its market position.
However, the Paperboards, Paper & Packaging segment faced difficulties, experiencing a 6.8% year-on-year decline in revenue. This was due to competition from low-priced Chinese imports, weak domestic demand, and increased domestic wood costs. On a positive note, the Agri-business segment saw a notable 22.2% revenue increase, driven by value-added agri products, leaf tobacco, and wheat. The hotel segment also reported growth, with revenue up 10.9% and PBIT rising by 11.5%, despite challenges such as fewer wedding dates and extreme weather affecting travel and dining.
Market Reaction and Future Outlook
ITC’s stock price ended at ₹489.85 per share, reflecting a nearly 1% decline. This minor drop is attributed to the modest growth reported in Q1 FY25. ITC is also moving forward with its plans to demerge its hotel business, with shareholder approval received and a petition submitted to the NCLT. Despite mixed segment performances and a slight margin decline, ITC’s investments and strategic initiatives position it for continued long-term success.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.