ITC Q4 profit declines 6.5% to Rs 3,797 crore, but beats estimates

Cigarette major ITC on June 26 reported a profit at Rs 3,797 crore for the quarter ended March 2020, registering a 6.5 percent growth YoY partly supported by lower tax cost following decline in tax rate. Profit in corresponding period of last year was at Rs 3,481.90 crore.

Revenue from operations during the quarter fell 6.4 percent year-on-year to Rs 11,420 crore due to nationwide lockdown for more than a week in March 2020. Revenue (excluding excise duty) dropped 9.6 percent to Rs 10,842.2 crore compared to corresponding period last fiscal.

Profit was expected at Rs 3,575 crore on revenue at Rs 11,633 crore for the quarter, according to the average of estimates of analysts polled by CNBC-TV18.

At the operating level, EBITDA margin, which was ahead of analysts’ estimates, expanded 30 basis points to 38.4 percent, partly due to lower employee expenses and raw material cost.  A CNBC-TV18 poll estimates for margin were at 37.4 percent.

Earnings before interest, tax, depreciation and amortisation (EBITDA) was down 8.9 percent to Rs 4,163.5 crore in Q4FY20 YoY.

ITC said in case of FMCG-others segment, EBITDA for the quarter stood at Rs 256.47 crore, increasing compared to Rs 228.27 crore in same period last year, while the full year FY20 EBITDA jumped to Rs 914 crore from Rs 688.2 crore in previous year.

In the full year (FY20), ITC's profit grew by 21.4 percent to Rs 15,136.05 crore, partly due to lower tax cost, and revenue (excluding excise duty) increased 1.4 percent to Rs 45,619.7 crore compared to previous year.

ITC during the lockdown period started on March 22, launched two products under Savlon brand - advanced hand sanitizer - Savlon Hexa and Surface Disinfectant Spray was the second consecutive launch.

The stock price gained 37 percent from its March lows, but corrected 15 percent year-to-date (2020) and 28 percent during the March quarter.