ITC’s net up 33% in Q1 on a strong show in cigarette, hotel, agri segments

• ITC reported a net profit of ₹4,389 crore, which grew by 33% from last year.
• Its hotels segment was the outlier with a three-fold growth in revenues as bookings went back to pre-pandemic levels.
• ITC however remains cautious due to the effects of high inflation on consumer spending especially in the rural areas.

ITC’s net profit for April-June quarter grew by 33% to ₹4,389 crore as compared to ₹3,276 crore in the same quarter last year, beating street estimates. Its total revenue from operations increased by 39% on year to ₹19,831 crore from ₹14,240 crore last year.

ITC Hotels segment was the outlier as it generated over three-fold revenue during the June quarter. Bookings went back to pre-pandemic level thanks to weddings and vacations. Business travel too resumed, adding to its growth.

“Average room rate (ARR) and occupancy is ahead of pre-pandemic levels driven by retail (packages), leisure, weddings and MICE segments. Domestic business travel continues to witness progressive normalization. Inward foreign travel, however, remains well below pre-pandemic levels,” said ITC in a release.
While ITC has 13 businesses in five segments, a huge chunk of its revenues come from cigarette business which also grew 29% on year. Its recent launches such as Classic Connect, Gold Flake lndie Mint, Gold Flake Neo SMART Filter, Capstan Excel etc also played out well.

FMCG too saw growth in particular out-of-home categories like Sunfeast Biscuits, Sunrise Spices, Aashirvaad Salt and Aashirvaad Svasti Dairy products.

However, ITC remains cautious due to high inflation and its impact on consumer spending especially in the rural areas.
“Economic activity gathered further momentum during the quarter with an uptick in business and consumer sentiments. However, geopolitical tensions and persistent supply chain disruptions resulted in hardening of commodity prices, exacerbating the unprecedented inflationary conditions prevailing in the economy. Inflationary headwinds also manifested in subdued consumption expenditure with volumes coining under pressure, particularly in rural markets,” said ITC.

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