Media Statement – Financial Results for the Quarter ended 30th September, 2023
19 Oct 2023
Standalone Financial Results for the Quarter ended 30th September, 2023
The global economy remains in the grip of a marked slowdown with growth in China and the Euro Area now expected to be lower than earlier estimates reflecting, inter alia, structural weaknesses in these economies. India remains a bright spot with buoyant tax collections, moderating inflation, credit growth uptick being some of the key positives amongst high frequency indicators. While public investment remains strong, consumption demand has been relatively subdued especially in the value segment and rural markets on the back of sub-par monsoons and persistent Food inflation which saw a sharp spike during the quarter. Green shoots of recovery are visible, with prospects of improved agri output, onset of the festive season, increase in rural wages and government spending on infrastructure auguring well for a recovery in rural markets. Pace of economic growth in China and other Advanced Economies, rising geopolitical tensions, crude oil prices, consumer price inflation (especially Food), commodity price volatility and agri output – would be the key monitorables in the near term.
Amidst a challenging operating environment as stated above and high base effect in some of its operating segments, the Company sustained its strong growth momentum during the quarter driven by focus on customer centricity, accelerated digital adoption, execution excellence and agility. Gross Revenue stood at Rs. 17549 crores representing a growth of 3.4% YoY (excl. Wheat & Rice exports: up 8.9%) while PBT at Rs. 6514 crores grew by 9.7% YoY. PAT grew by 10.3% YoY to Rs. 4927 crores. Earnings Per Share for the quarter stood at Rs. 3.96 (previous year Rs. 3.61).
FMCG – OTHERS
• The FMCG Businesses continue to deliver strong performance with Segment Revenue growing 8.3% YoY on a high base to Rs. 5,292 crores (2-yr CAGR +14.5%); Segment EBITDA margins expanded 150 bps YoY to 11%.
– Atta, Spices, Personal Wash and Agarbatti drive growth amidst relatively subdued consumer demand environment.
– In the Stationery business, Classmate Notebooks and Pens witnessed strong growth on YoY basis. Exports continue to be scaled up leveraging capabilities of the state-of-the-art owned manufacturing facility.
– The FMCG Businesses continued to witness robust growth in both urban and rural markets on a high base, driven by enhanced distribution footprint, superior last mile execution, deep consumer insights, purposeful innovation and portfolio premiumisation. Both traditional and emerging channels (viz. Modern Trade, e-Commerce, Quick Commerce) witnessed robust traction driven by sharp execution of channel-specific business plans, collaborations, format-based assortments catering to the needs of a diverse set of shoppers and category-specific sell-out strategies. Certain categories such as Biscuits, Snacks, Noodles, popular Soaps witnessed increasing competitive intensity including from local/regional players in the backdrop of commodity price deflationary conditions.
– While commodity prices declined on a YoY basis, the overall input cost table remains elevated compared to pre-pandemic levels; certain commodities such as wheat, maida, sugar, potato etc. witnessed sequential uptick in prices. The Businesses remain focused on driving profitability improvement through multi-pronged interventions viz. premiumisation, supply chain optimisation, digital interventions across the value chain, strategic cost management and judicious pricing actions.
– The Company’s Trade Marketing & Distribution highway has transformed into a smart omni-channel network including 6 Direct to Consumer (D2C) platforms. ‘ITC e-Store’, the Company’s exclusive D2C platform, is now operational in 24,000+ pin-codes and continues to receive excellent consumer response. Category specific D2C platforms viz. Classmateshop.com, Dermafique.com and Aashirvaad.com/Meri Chakki are being scaled up to gain consumer insights, as well as commerce. These initiatives continue to receive encouraging consumer response.
– The Company’s digitally powered eB2B platform, UNNATI app (now also available in several vernacular languages) covers over 6.3 lakh outlets, facilitating sharp and direct engagement with retailers, superior analytics, personalised recommendations of hyperlocal baskets based on consumer purchase insights, and deeper brand engagement.
► Branded Packaged Foods Businesses
• ‘Aashirvaad’ Atta posted robust growth reinforcing its leadership position in the Branded Atta industry
– Value-added atta range sustained its strong growth momentum driven by increased thrust in Modern Trade and e-Commerce channels.
– In line with its strategy to address value-added adjacencies leveraging mother brands, the Aashirvaad portfolio was augmented with the launch of several differentiated variants such as ‘Gluten Free Flour’, ‘Ragi Flour’, ‘Multi-Millet Mix’, Rava (‘Aashirvaad Samba Broken Wheat’, ‘Aashirvaad Bansi Rava’ and ‘Aashirvaad Double Roasted Suji Rava’), ‘Aashirvaad Organic Dals’, ‘Aashirvaad Besan’ and ‘Aashirvaad Vermicelli’. These products have received excellent response and continue to gain consumer franchise in launch markets.
• ‘Sunfeast’ Biscuits and Cakes recorded resilient performance during the quarter on the back of stability in core brands and scale up of recent launches. The ‘Sunfeast Dark Fantasy’ range of differentiated cookies sustained its leadership position in the premium segment. ‘Mom’s Magic’ range of cookies also witnessed strong growth. The portfolio mix was further enriched with the launch of ‘Bounce Day & Night’ – a delicious dark choco biscuit with soft vanilla cream. Towards deepening consumer engagement, the brand launched the highly innovative ‘MyFantasyAdWithSRK’ campaign, leveraging Gen-AI technology, enabling consumers to live their #fantasy of starring in a personalised advertisement opposite the iconic Shah Rukh Khan. The initiative has already witnessed more than 7 lakh+ engagements within a short span of time.
• ‘YiPPee!’ Noodles sustained its position as a strong No. 2 brand amidst increasing competitive intensity. In line with the Government’s initiative of promoting millets and in keeping with the Company’s strategy of creating a portfolio of healthier and ‘Good For You’ products, the Business augmented its portfolio with the launch of ‘YiPPee! Magic with Millets’. During the quarter, the brand launched ‘Be a Star’ contest in its new campaign ‘Why just be happy, when you can be YiPPee!’, inspiring participants to craft, capture, and share their most creative ‘Noodle slurping moment’ with YiPPee!.
• ‘Bingo!’ Snacks continued to strengthen its product portfolio across an exciting range of snacks and namkeens, with a focus on the target cohort i.e. youth segment. Recently launched variants viz. ‘Bingo! Nachos Chilli Limon’ and ‘Bingo! Tedhe Medhe Cream & Onion’ have been well received by customers and are being scaled up. The Business launched a differentiated millet-based variant – ‘Bingo! Tedhe Medhe Chatpata Twist’, a deliciously crunchy snack with a spicy twist, which continues to gain increasing consumer traction.
• ‘Sunrise’ Spices posted robust growth during the quarter. Product portfolio was augmented with launch of an exclusive ‘Swaad Bihar Ka’ range of spices customised to regional taste including ‘Sunrise Chicken Masala’, ‘Sunrise Meat Masala’, ‘Sunrise Kitchen King Masala’ and ‘Sunrise Rajshahi Garam Masala’ in a limited-edition pack featuring ‘Madhubani’ artwork.
• The Frozen Snacks category under the ‘ITC Master Chef’ brand, delivered robust growth, powered by a range of innovative and differentiated offerings. Recently launched variants such as ‘ITC Master Chef Paneer Pakoda’, ‘ITC Master Chef Batata Vada’ and ‘ITC Master Chef Crispy Onion Rings’ continue to gain strong traction.
• ‘Aashirvaad Svasti’ fresh dairy portfolio comprising pouch milk, curd, lassi and paneer continued to gain strong consumer traction on the back of best-in-class quality standards, differentiated products and superior taste profile.
► In the Personal Care Products Business, ‘Fiama’ range of personal wash products registered strong growth fuelled by investments in brand building, wider distribution and growth in emerging channels. ‘Savlon Cool’ soap based on the proposition of skin friendly germ protection continued to garner encouraging consumer response. In the Homecare portfolio, Nimyle posted robust growth on the back of its unique proposition of ‘100% Natural Action’ and hygienic floors for children and pets.
► In the Education and Stationery Products Business, ‘Classmate’ Notebooks fortified its leadership position with continued focus on portfolio premiumisation, exports and leveraging institutional strengths. The premium portfolio comprising ‘Paperkraft’, ‘Classmate Pulse’ and ‘Classmate Interaktiv’ continued to gain strong traction. To build brand affinity with college students, Classmate Pulse Style Icon campaign was launched with on-ground activation comprising quizzes, competitions targeting the top 75 universities across the country, leveraging back to college season. The recently launched ‘Classmate Spin Ball Pen’ was amplified with high-decibel TV campaigns.
► ‘Mangaldeep’ Agarbattis and Dhoop recorded robust growth during the quarter anchored on a range of differentiated products and enhanced visibility. The portfolio was augmented with the launch of ‘Mangaldeep Scent 3in1’, ‘Mangaldeep Flora’ and a new ziplock range. The Dhoop portfolio was further enhanced with the launch of ‘Dhoop 3in1’. In Safety Matches, the Business strengthened its market leadership position by driving value-added portfolio and wider distribution.
FMCG – CIGARETTES
Net Segment Revenue and Segment PBIT up 8.5% and 8.0% YoY respectively; 2-yr CAGR: Net Segment Revenue +15.7%, Segment PBIT +15.5%
• The Business continues to counter illicit trade and reinforce market standing by fortifying the product portfolio through innovation, democratising premiumisation across segments and enhancing product availability backed by superior on-ground execution
– Several differentiated variants launched recently continue to perform well.
• As seen in the past, stability in taxes on cigarettes, backed by deterrent actions by enforcement agencies, enables volume recovery for the legal cigarette industry from illicit trade leading to higher demand for Indian tobaccos and bolstering revenue to the exchequer from the tobacco sector.
• Sharp escalation in costs of leaf tobacco and certain other inputs, along with increase in taxes, largely mitigated through improved mix, strategic cost management and calibrated pricing.
Segment Revenue grew 21.2% YoY, on a high base (1.5x of Q2 FY20); Segment PBIT up 50% YoY (~7.2x of Q2 FY20). Stellar performance across properties driven by retail and MICE segments.
• Strong growth was witnessed in ARRs across properties. Occupancy remained flattish YoY mainly due to renovations and relatively fewer wedding dates during the quarter. The Business continued to focus on its strategy of offering a host of curated propositions across accommodations and iconic cuisine brands to augment revenues across properties.
– Strategic investments towards renovations and refurbishments continue in line with the Businesses’ commitment to deliver exceptional quality and seamless experience across properties.
• Segment EBITDA margin expanded by 170 bps YoY to 30.7% driven mainly by higher RevPAR, curated packages, finest F&B offerings and strategic cost management initiatives.
• The Business had the exclusive distinction of curating and serving from the best of India’s culinary heritage at the prestigious G20 Summit, Bharat Mandapam, New Delhi. ITC Maurya also had the honour of hosting the President of the United States of America and the entire US delegation to the Summit.
• Digital investments continue to be leveraged towards enhancing guest experience, facilitating guest acquisition, augmenting revenue generation and driving operational efficiency.
• In line with its ‘asset-right’ strategy, the Business added three new properties to the Group portfolio including ‘WelcomHeritage Santa Roza, Kasauli’, ‘Fortune Park Hoshiarpur’ and ‘Fortune Ranjit Vihar, Amritsar’ and continues to strengthen its pipeline of managed properties to be launched in a phased manner over the next few quarters.
• Reaffirming the Company’s commitment to the ethos of ‘Responsible Luxury’, ITC Maurya received the ‘Best Green Hotel’ award by H&RA recognizing the sustained commitment towards excellence in hospitality services. Further, Welcomhotel Guntur received the ‘Best Eco-friendly Hotel’ award at Andhra Pradesh State Annual Tourism Excellence Award – 2023.
• During the quarter, the Board approved the scheme of demerger of Hotels Business under a scheme of arrangement, with ITC holding a stake of ~40% in ITC Hotels and the balance shareholding of ~60% to be held directly by shareholders of ITC proportionate to their shareholding in ITC.
– The Scheme has been submitted to stock exchanges for requisite approvals.
Agri Business Revenue grew by 26.4% YoY (excl. Wheat & Rice exports) driven by Value Added Agri products & Leaf Tobacco
• During the quarter, stock limits on wheat, ban on non-basmati rice exports and export duty on parboiled rice, further limited business opportunities for the Agri Business.
• Capacity utilisation of the recently commissioned state-of-the-art value-added Spices processing facility in Guntur ramped up. The Business seeks to leverage the facility’s multi-dimensional capabilities, its identity-preserved sourcing expertise, custody of supply chain and strong customer relationships to rapidly grow exports to Food Safe Markets.
• During the quarter, ITC IndiVision Limited (IIVL), a wholly owned subsidiary of the Company, received requisite regulatory approvals for its facility to manufacture Nicotine & Nicotine Derivative products conforming to US & EU pharmacopoeia standards. The distinctive capabilities of the Company’s Agri Business in crop development and the ability to provide complete traceability & assurance of sustainability across the value chain, will enable establishing IIVL as the trusted partner for supplying high quality nicotine/nicotine derivative products to discerning customers.
• ITCMAARS (Metamarket for Advanced Agriculture and Rural Services) – a crop-agnostic ‘phygital’ full stack AgriTech platform has been scaled up across nine states. Over 1250 Farmer Producer Organisations (FPOs) encompassing more than 10.6 lac farmers have been added to the Company’s network.
PAPERBOARDS, PAPER & PACKAGING
Performance in the Paperboards, Paper & Packaging Segment reflects the impact of low priced Chinese supplies and muted demand in export markets, sharp reduction in global pulp prices, relatively subdued domestic demand and high base effect; Segment Revenue declined 9.5% YoY (2-yr CAGR +6.4%)
• Low priced Chinese supplies in global markets, drop in Chinese domestic demand and slump in EU markets exerted pressure on exports. Further, subdued consumer demand in domestic markets impacted customer offtake during the quarter.
• Margins were impacted largely by sharp drop in realisations and increased cost of inputs (primarily wood and coal). Segment PBIT declined 49.9% YoY.
• Sharp drop in net sales realisation and global pulp prices witnessed during the quarter are likely to have bottomed out; green shoots of revival in demand for VAP and recycled boards were visible towards the end of the quarter.
• Fine paper prices remained relatively firm and Décor paper witnessed strong performance.
• Integrated business model and strategic interventions in import pulp substitution, High Pressure Recovery Boiler, digital interventions and cost competitive fibre chain partially mitigated inflationary impact.
• Augmentation of in-house chemical pulp capacity was completed during the quarter. The additional capacity of approx. 20% of chemical pulp, will enable higher import substitution and reduce operating costs.
• In the Packaging and Printing Business, new business development is being accelerated in domestic and export markets offering innovative and customised solutions, with special focus on consumer electronics, QSR and personal care products. Capacity utilisation at the recently commissioned Nadiad unit in Gujarat continues to be ramped up progressively to efficiently service customers in proximal markets.
• The sustainable paperboards/packaging solutions portfolio continues to witness strong growth leveraging cutting-edge innovation platforms (+27% YoY; 2-yr CAGR +62%). The Company’s wholly owned subsidiary, ITC Fibre Innovations Limited, is in the process of setting up a state-of-the-art premium Moulded Fibre Products manufacturing facility in Badiyakhedi, Madhya Pradesh. The project is progressing as per schedule.
CONTRIBUTION TO SUSTAINABLE DEVELOPMENT
ITC is a global exemplar in ‘Triple Bottom Line’ performance and is the only enterprise in the world of comparable dimensions to have achieved and sustained the three key global indices of environmental sustainability of being ‘water positive’ (for 21 years), ‘carbon positive’ (for 18 years), and ‘solid waste recycling positive’ (for 16 years). The Company sustained its ‘AA’ rating by MSCI-ESG for the 5th successive year – the highest amongst global tobacco companies. The Company has also been included in the Dow Jones Sustainability Emerging Markets Index for the third year in a row – a reflection of being a sustainability leader in the industry and a recognition of its continued commitment to people and planet.
ITC has also been rated at the ‘Leadership Level’ score of ‘A-‘ for both Climate Change and Water Security (Asia and Global average at ‘C’ for climate change and ‘B’ for water security) by CDP, a reputed independent global platform for disclosures on environmental impacts.
The Company’s infrastructure facilities continue to set new benchmarks of sustainability. All luxury collection hotels of the Company are now LEED Platinum certified with 12 ITC Hotels being certified as LEED Zero Carbon.
The Sustainability & Integrated Report 2023 is available on the Company’s corporate website at
Please refer link below for performance highlights of the quarter:
The Board of Directors, at its meeting on 19th October 2023, approved the financial results for the quarter ended 30th September 2023, which are enclosed.