Bingo wafers, made by ITC Ltd., sit for sale at a shop in Mumbai. (Photographer: Adeel Halim/Bloomberg News)

Q2 Results: ITC Profit Meets Estimates, Stock Declines

ITC Ltd.’s net profit rose for the eleventh straight quarter, matching analyst estimates.

The cigarettes-to-luxury hotels conglomerate’s net profit rose 12 percent year-on-year to Rs 2,955 crore for quarter-ended September, according to its exchange filing. That compares with Rs 2,879-crore estimate of analysts tracked by Bloomberg. Revenue rose 7 percent on a yearly basis to Rs 11,068 crore.

ITC’s operational performance was also in line with analyst estimates. The operating income or the earnings before interest, tax, depreciation, and amortisation rose 12 percent to Rs 4,205 crore year-on-year. Operating margin expanded 150 basis points to 36.5 percent during the quarter.

The company posted double-digit revenue growth in all verticals except paper boards business. Revenue generated from hotels business grew 20 percent year-on-year to Rs 362 crore. But it was offset by higher raw material costs.

Other Highlights

  • Raw material costs rose 18.3 percent year-on-year to Rs 3,382 crore.
  • Raw material costs to total revenue at 30 percent versus 29.3 percent.
  • ITC Hotels entered Goa by acquiring Park Hyatt Goa Resort and Spa for Rs 541 crore in September.

Shares of the company fell 3.4 percent to Rs 277.90 apiece after the earnings announcement.