ITC fell 2.58% to Rs 220.60 after the company's net profit declined 11.6% to Rs 3,663 crore on 0.05% decline in net sales to Rs 11,698.60 crore in Q3 FY21 over Q3 FY20.
EBITDA declined by 7.2% to Rs 4,281 crore in Q3 December 2020 from Rs 4,613 crore in Q3 December 2019. Profit before tax in Q3 FY21 stood at Rs 4,848 crore, down by 3.7% from Rs 5,036 crore in Q3 FY20. Current tax outgo rose by 4.7% year-on-year (YoY) to Rs 1125.72 crore in Q3 FY21.
Total FMCG segment revenue rose 5.1% to Rs 9060 crore during the period under review. In the FMCG segment, cigarettes revenue increased by 3.5% YoY to Rs 5498 crore while the revenue from other FMCG segment improved by 7.5% YoY to Rs 3562 crore during the quarter.
Hotel business revenue stood at Rs 235 crore (down 57.4% YoY), agri-business revenue was at Rs 2482 crore (up 18.5% YoY) and paperboards, paper & packaging revenues were at Rs 1478 crore (down 5% YoY) in the third quarter.
ITC said that the operating environment remained challenging even as economic activity picked up pace progressively during the quarter with the easing of restrictions and increased mobility.
With respect to the cigarettes business, the company said that the volumes and revenue witnessed strong sequential recovery led mainly by metros and large town markets on the back of progressive easing of restrictions and enhanced mobility. It strengthened direct reach in target markets across all traditional trade channels and also augmented the stockist network to service rural/semi-urban markets more efficiently.
However, the 13% tax hike with effect from 1 February 2020 continued to weigh on Legal Industry volumes
"Wide availability of smuggled cigarettes continues despite deterrent actions and heightened levels of seizures by concerned authorities; remains a key challenge for the legal cigarette industry which has witnessed significant reduction in volumes in recent years, it added.
With respect to the FMCG Others category, ITC said that the significant surge in demand for staples and convenience foods witnessed during the lockdown phase ebbed during the quarter with consumers broadening their purchase assortment and lower 'at-home' consumption on the back of increased mobility. Demand for health & hygiene products remained elevated even as the pace of growth moderated as compared to the first half of the year.
Discretionary or 'out-of-home' consumption products witnessed smart recovery buoyed by pent-up demand and increased availability across channels. Heightened concerns on hygiene and safety continued to manifest in consumers' preference for trusted brands, it further said.
With respect to the hotels business, the company informed that wedding business, staycations/motorable getaways were the key drivers besides healthcare/quarantine related business. Revenue per available room improved across business locations, but remains below pre-Covid levels. Aggressive cost reduction measures, the company said, led to approximately 44% reduction in controllable cash fixed costs.
The paperboards and specialty papers business recorded strong recovery in volumes with exports continuing to grow at a rapid pace. However, softer realisations weighed on revenue growth.
Consumer offtake continued to improve across most major end user segments in paperboards barring publication, notebooks and wedding cards. Specialty papers witnessed strong growth driven by pharma and dor segments.
In the agri business segment, revenue growth was driven by higher wheat supplies for Aashirvaad atta and trading opportunities in rice, soya and wheat exports. The company leveraged the e-Choupal network to enhance direct procurement amidst challenging operating conditions. In the value-added portfolio, export of spices to food safe markets continued to gain strong traction.
The cigarette major's board recommended an interim dividend of Rs 5 per share for the financial year ending 31 March 2021.
ITC is engaged in the marketing of fast-moving consumer goods (FMGC). The firm operates through four segments: FMCG; hotels; paperboards, paper and packaging, and agri business. ITC is the market leader in cigarettes in India. The company also has presence in branded packaged foods, personal care, education and stationery, agarbattis & safety matches, lifestyle retailing, hotels, paperboards & specialty papers, packaging, agri-business & IT.
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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)
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