ITC Q3 Results: Profit Falls 12% But Meets Estimates
Bingo wafers, made by ITC Ltd., sit for sale at a shop in Mumbai, India. (Photographer: Adeel Halim/Bloomberg News)

ITC Q3 Results: Profit Falls 12% But Meets Estimates

ITC Ltd.’s quarterly profit fell but met estimates even as unsold stock of its cigarettes rose.

Net profit of the consumer goods maker—also India’s largest cigarette maker—fell 12% year-on-year to Rs 3,662.8 crore in the quarter ended December, according to its exchange filing. That compares with the Rs 3,613.5-crore consensus estimate of analysts tracked by Bloomberg.

Revenue rose 5% over the preceding year to Rs 12,580.4 crore—analysts were expecting Rs 11,935.7 crore.

The company has recommended an interim dividend of Rs 5 per share for the year ending March.

Highlights (YoY)

  • Operating profit fell 7% to Rs 4281.3 crore.
  • Operating margin at 34.03% vs 38.4%.
  • Cigarette segment’s revenue increased 3.5% to Rs 5,498.4 crore.
  • Revenue of the remaining FMCG business rose 7.5% to Rs 3,561.8 crore.
  • Hotel revenue fell 57.4% to Rs 235.20 crore.
  • Agri-business revenue rose 18.5% to Rs 2,481.8 crore.
  • Paper-board segment revenue declined 5% to Rs 1,477.53 crore.

What ITC Said About Its Segment-Wise Performance


Cigarette volumes and revenue witnessed sequential recovery led mainly by metros and large towns amid progressive easing of pandemic-induced restrictions and enhanced mobility.

“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,” ITC said.

The cigarette major also said it strengthened direct reach in target markets across traditional trade channels. Stockist networks, it said, were augmented to service rural and semi-urban markets more efficiently.

The 3% tax hike effective from February last year continues to weigh on industry volumes.

FMCG Others

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, the company said. Demand for health and hygiene products, it said, 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 a recovery buoyed by pent-up demand and increased availability across channels.
  • Savlon range of health and hygiene products sustained growth trajectory, albeit at a relatively lower pace compared to the previous two quarters.
  • ‘YiPPee!’ Noodles continued to record strong growth.
  • ‘Aashirvaad’ Atta and ‘Sunfeast’ biscuits, which had witnessed significant surge in demand in the first half of the year, moderated during the quarter.
  • ‘Bingo!’ snacks regained double-digit revenue growth while deodorants and confectionery saw appreciable sequential uptick.
  • The company’s FMCG sales through the e-commerce channel has doubled over last year. The channel contributed 5% to the segment’s revenue.
  • Hypermarkets and supermarkets recovered during the quarter after a soft first half. Sales in rural markets remained strong while urban markets witnessed progressive improvement aided by increased mobility and easing of restrictions.


Weddings, staycations and motorable getaways were the key drivers besides healthcare and quarantine related businesses.

Revenue per available room improved across business locations, but remains below pre-Covid levels. Aggressive cost reduction measures, the company said, led to 44% reduction in controllable cash fixed costs.

Paperboards, Paper And Packaging

Paperboards and specialty papers business recorded a recovery in volumes with exports continuing to grow, the company said.

Softer realisations weighed on revenue growth while, 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 décor segments. The cartons segment of the packaging and printing business recorded robust growth led by exports.

Agri Business

Revenue growth was driven by higher wheat supplies for Aashirvaad atta and trading opportunities in rice, soya and wheat exports.

ITC said it leveraged the “e-choupal” network to enhance direct procurement amid challenging operating conditions.

In the value added portfolio, export of spices to food safe markets continued to gain traction. However, leaf exports were impacted by subdued demand for leaf tobacco in international markets.

Shares of ITC closed 0.4% lower on Thursday before the results were announced, compared with a 0.4% rise in the benchmark NSE Nifty 50.

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