Faced with a sharp decline in consumption, especially in rural areas owing to the pandemic, ITC Ltd posted a 4.93 per cent decline in its revenue from operations at Rs 12,560.64 crore during the quarter ended March 31, 2020 even as its pre-tax profit fell by 7.75 per cent at Rs 4,743.47 crore.

However, owing to tax adjustments following the reduction in corporate income tax rates last year, the company received a credit of Rs 340.94 crore which pulled the net profit up by 9.18 per cent at Rs 3,926.72 crore. The company had registered a net profit of Rs 3,596.64 in the Q4 period of the 2018-19 fiscal year.

Abneesh Roy, executive vice president at Edelweiss Securities said that the sales and EBITDA performance is in line with the street expectations.

ITC said that just as the business environment was showing signs of an incipient recovery in the beginning of the Q4 last fiscal year, the onset of Covid-19 pandemic, changed the situation dramatically.

Moreover, in the initial stages, the contagion had a significant impact on its hotels and education and stationery products businesses as it coincided with the peak period and the onset of the school season which were closed owing to the pandemic.

According to ITC, the FMCG industry growth decelerated sharply during the year due to sluggish demand conditions, tight market liquidity and delayed monsoons followed by excessive rainfall in certain parts of the country. Overall, industry growth rates halved to 7 per cent in the third quarter of the last fiscal year as compared to same period of 2018-19, with the situation getting worse in Q4 due to the COVID-19 pandemic induced lockdowns across the country.

Rural markets, which account for around one-third of the industry and have been the key driver of growth in recent years, witnessed a steep fall in growth rates. Rural growth stood at 0.8x of urban markets in FY20 compared to 1.4x in FY19.

At the onset of the lockdown in March this year, ITC had decided to shut down its cigarette manufacturing units and focus on the foods and personal care businesses. In the period under review, the revenue from cigarettes fell by 4.94 per cent at Rs 5,750.44 crore while the profit from this business declined by 10.60 per cent at Rs 3,649.88 crore.

However, cigarettes, which are estimated to have registered a 10 per cent volume decline, continued to contribute over 46 per cent to ITC’s overall revenue.

The company registered a 2.78 per cent decline in its non-cigarette FMCG business at Rs 3,190.34 crore. Prior to the outbreak of the pandemic, its non-cigarette FMCG segment was registering a double-digit revenue growth which got impacted in the fourth quarter owing to the spread of Covid-19 and the resultant lockdown.

In the first nine months of the last fiscal year, ITC had registered around 15 per cent revenue growth in its agri business driven by trading opportunities in oilseeds and pulses and scaling up of the value-added portfolio, especially spices, frozen shrimps and frozen snacks. However, it faced supply chain disruptions owing to the pandemic towards the end of the year which pulled down revenues by 10.04 per cent at Rs 1,899.01 crore in the quarter under review.

Its hotels business, which was registering a 19 per cent revenue growth till December 31, 2019, primarily owing to addition of new properties, also got severely impacted in the Q4 period owing to the pandemic and the lockdown registering a 6.68 per cent decline at Rs 494.76 crore.

In the paperboards, paper and packaging segment, ITC registered a revenue decline of 5.11 per cent at Rs 1,458.87 crore mainly on account of sluggish growth in end-user industries such as FMCG, Pharma and Liquor which resulted in muted customer offtake.

Against the dividend of Rs 5.75 per share in 2018-19, ITC has declared an ordinary dividend of Rs 10.15 per share for the 2019-20 fiscal year. Total cash outflow in this regard will be Rs 12,476.61 crore.

The company’s scrip on the BSE fell by 3.54 per cent at Rs 195.10 apiece on Friday.