ITC Q4: Net Profit Slips 1.3 Per Cent YoY, Agri Business Revenue Affected By Trade Restrictions

ITC Ltd reported a decline of 1.3 per cent in its net profit on a year-on-year (YoY) basis in its fourth quarter (Q4) earnings on Thursday. The cigarette-to-soap maker logged a net profit of Rs 5,020.20 crore for the March quarter in the 2023-24 financial year (FY24) against a net profit of Rs 5,086.6 crore in the fourth quarter of the previous 2022-23 fiscal year (FY23).

The conglomerate clocked a marginal rise of 1.4 per cent in its revenue from operations for Q4FY24 on a year-on-year basis. It posted a revenue of Rs 17,752.87 crore for the quarter under review against its Q4 revenue of Rs 17,506.08 crore for FY23.

Segment Revenue

The firm recorded a major drop in the revenue of its agri business segment. The revenue of the segment stood at Rs 3,100.73 crore in the January-March quarter in FY24, down by 13 per cent from the revenue of Rs 3,578.60 crore clocked in the corresponding quarter a year earlier. 

“Geopolitical tensions and climate emergencies have led to concerns over food security and food inflation globally. To ensure India remains food secure, Government has had to impose trade restrictions on agri commodities; consequently limiting business opportunities for the Agri Business. The Company continues to engage with farmers to build resilience in agrarian practices against extreme weather event,” the firm noted.

The firm clocked a strong performance in its FMCG-Others segment as well, despite dampened demand and major surge in competition from regional/local players. “Sustained margin expansion on the back of premiumisation, delayering operations, agile cost management and judicious pricing actions led to robust growth in operating profits. Segment Revenue for the year grew by 9.6 per cent on a high base with Segment EBITDA growing at a significantly faster pace of 19.7 per cent to Rs. 2338.50 crore,” the company said.

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Dividend

The firm’s board recommended a final dividend of Rs 7.50 per share. “Including Interim Dividend of Rs. 6.25 per share paid on 27th February, 2024, Total Dividend for the financial year ended 31st March, 2024 amounts to Rs. 13.75 per share,” the conglomerate shared via a regulatory filing.

Sharing an outlook, the company said, “While consumption demand remained subdued in Q4 FY24, improving macro-economic indicators, prospects of a normal monsoon and green shoots witnessed in rural demand recovery after several quarters, augur well for revival in consumption demand in the near term. With its focus on consumer centricity, purposeful innovation, agility, and execution excellence, the Company remains confident of navigating the short-term challenges and creating sustained value for all stakeholders.”