ITC on Thursday reported an 11.5% year-on-year drop in net profit for ₹Rs 3,662.85 crore net profit for the quarter ended December 31, 2020. The leading hotel cigarette company posted a net profit of ₹Rs 4,141.93 crore for the corresponding quarter of last year. Consolidated profit for the corresponding period was ₹4,050.4 million rupees.
Gross revenue grew 5% year-on-year to ₹12,491.63 in the third quarter of fiscal year 21, thanks to a strong agribusiness and other mass consumer goods businesses. Total revenue from services and products increased to ₹12,491 crore in the December quarter ₹11,912 crore a year ago. Total expenses increased 11.2% to ₹9,765.56 crore in the December quarter against ₹Rs 8,779.1 crore in the same period a year ago.
ITC’s earnings before interest, taxes, depreciation and amortization (EBITDA) fell 7.2% year-on-year to ₹Rs 4,281.35 crore during the December quarter. The operating profit was ₹4,281 crore during the same quarter last year. The company’s operating margin contracted 280 basis points year-on-year to 36.3% in Q3FY21 from 39.1% in Q3FY20.
Cigarette sales improved sequentially during the quarter under review. Revenue from his cigarette business, which contributed 43% to the total business, increased to ₹6,091.17 crore for the December 2020 quarter, compared to ₹Rs 5,944.86 crore in the corresponding period. Cigarette business earnings before interest and taxes (EBIT) fell 8.7% year-on-year to ₹Rs 3,658.65 crore in the third quarter of fiscal year 21, the company added.
“Cigarette volumes and revenues witnessed a strong sequential recovery led mainly by metropolitan areas and the markets of large cities thanks to the progressive relaxation of restrictions and improved mobility,” the company said in a statement to the stock market.
ITC’s hotel business was severely affected by the coronavirus pandemic. Revenues from the hotel business registered a year-on-year drop of 56.7% for ₹Rs 248.87 crore in the third quarter of fiscal 21. However, the hotel business posted positive EBITDA in the December quarter as revenues had seen a gradual recovery with an improvement in the room and dining business and drinks.
Agribusiness revenues increased 19.3% in ₹2,694 crore compared to ₹2,258 crore during the same period of the year. Revenue from the cardboard, paper and packaging business fell 5% year-on-year to ₹1,555.36 crore.
The Consumer Goods and Others segment experienced 13% year-on-year growth in revenues in ₹3,752.61 crore. EBITDA grew 28% to ₹Rs 326 crore with margins expanding 150 bp yoy to 9.2%, the company said.
“The significant increase in demand for staple and convenience foods that occurred during the closing phase decreased during the quarter as consumers expanded their assortment of purchases and reduced consumption ‘at home’ thanks to greater mobility,” the company said.
ITC declared and dividend on account of ₹5 per common share of ₹1 each for the fiscal year ending March 31, 2021.
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