Business

Net profit drops to ₹3,663 crore, operating profit down 7%

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ITC on Thursday reported a 11.5% year-on-year drop in net profit to 3,662.85 crore net profit for the quarter ended on 31 December, 2020. The cigarette-to-hotels major posted a net profit of 4,141.93 crore for the corresponding quarter last year. Consolidated profit in the corresponding period stood at 4,050.4 crore.

Gross revenue grew 5% year-on-year to 12,491.63 in Q3FY21, on the back of strong agribusiness and FMCG-other business. Total revenue from the services and products rose to 12,491 crore in the December quarter from 11,912 crore a year ago. Total expenses increased 11.2% to 9,765.56 crore in the December quarter against 8,779.1 crore in the same period a year ago.

ITC’s earnings before interest, tax, depreciation and amortisation (EBITDA) dropped 7.2% year-on-year to to 4,281.35 crore during 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.

Sales of cigarettes improved sequentially during the quarter under review. Revenue from its cigarette business, which contributed 43% to total business, rose to 6,091.17 crore for December quarter 2020, compared with 5,944.86 crore in corresponding period. Cigarette business’ earnings before interest and tax (EBIT) dropped 8.7% year-on-year to 3,658.65 crore in Q3FY21, the company added.

“The cigarette 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,” the company said in a stock exchange filing.

ITC hotel business was severely affected by coronavirus pandemic. The revenue from hotel business reported 56.7% year-on-year decline to 248.87 crore in Q3FY21. However, the hotel business turned EBITDA positive in December quarter as the revenue had witnessed progressive recovery with improvement in Room and F&B business.

The revenue from agri business rose by 19.3 per cent at 2,694 crore compared with crore 2,258 crore during the same period a year. The revenue from revenues from paperboards, paper and packaging business dropped 5% year-on-year to 1,555.36 crore.

FMCG and others segment witnessed a 13% year-on-year growth in revenue at 3,752.61 crore. EBITDA grew by 28% to 326 crores with margins expanding by 150 bps year-on-year to 9.2%, the company said.

“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.

ITC declared and interim dividend of 5 per ordinary share of 1 each for the financial year ending on 31 March, 2021.

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