ITC Ltd’s gross revenue for the quarter stood at Rs 11,094.89 crore, representing a growth of 14.7 per cent driven mainly by FMCG-others, agri business and hotels.
Profit before depreciation, interest and tax at Rs 4,205.97 crore and profit after tax at Rs 2,954.67 crore grew by 11.8 per cent and 11.9 per cent, respectively.
Total comprehensive income stood at Rs 2,754.55 crore (previous year Rs 2,610.80 crore). Earnings per share for the year stood at Rs 2.42 (previous year Rs 2.17).
The segment’s revenue registered robust growth of 12.7 per cent during the quarter, led by staples, snacks and meals and biscuits in the
branded packaged foods business, partly offset by restructuring of its retail footprint and its trade presence in the lifestyle retailing business. While the overall demand conditions remain stable, the signs of recovery are visible, especially in rural markets.
The segment’s earnings before interest, taxes, depreciation and amortisation (EBITDA) at Rs 158.84 crore posted strong growth of 77 per cent on the back of enhanced scale, product mix enrichment and cost management initiatives, despite sustained investment in brand building, gestation costs of new categories viz juices, dairy and chocolates in the branded packaged foods business and input cost pressures.
The branded packaged foods businesses posted robust growth in revenue with most major categories recording improvement in market standing.
- In the staples, snacks and meals business, Aashirvaad atta consolidated its leadership position across markets with a pick-up in sales momentum. Increasing consumer traction for Bingo! Potato Chips and Tedhe Medhe continued to drive growth in the snacks business. In the Instant Noodles Category, YiPPee! Magic Masala continued to garner consumer franchise anchored on superior quality and a differentiated value proposition
- In the confections business, Dark Fantasy Choco Fills witnessed further acceleration in growth momentum driven by superior product attributes, focussed communication and consumer activation. The company continued to launch innovative and first-to-market products such as Dark Fantasy Choco Jellifills, Bounce Minis and Bounce cakes. These products are being rolled out nationally, based on encouraging response in the launch markets. Portfolio premiumisation continued in the Confectionery category with higher salience of Re 1 and above products in the sales mix
- In the dairy and beverages business, B Natural juices scaled up volumes during the quarter leveraging a portfolio of differentiated products anchored on the not from concentrate platform. Aashirvaad Svasti milk was extended to Patna during the quarter and has received encouraging response from consumers
- Product portfolio of the Fabelle range of luxury chocolates was augmented with the introduction of a new range of truffles – Dessert Collection. Fabelle continues to receive excellent response from discerning consumers setting a new benchmark in the luxury chocolates segment
- The branded packaged foods business continue to leverage state-of-the-art integrated consumer goods manufacturing facilities (ICML) to service proximal markets in a highly efficient and responsive manner.
Over the last two years, ICMLs have been established at Uluberia (West Bengal), Guwahati (Assam), Mysuru (Karnataka), Kapurthala (Punjab) and Panchla (West Bengal), significantly expanding the operational footprint which is being leveraged to scale up the aforestated businesses and provide structural advantages. During the quarter, a new ICML was commissioned at Trichy, Tamil Nadu.
Over 15 projects are underway and in various stages of development – viz land acquisition/site development, construction of buildings, equipment installation and other infrastructure.
The segment’s revenue and EBITDA posted robust growth of 20.8 per cent and 35 per cent, respectively. This was driven by higher room rates, increase in occupancy, strong food and beverage sales and high operating leverage notwithstanding gestation costs of new properties.
The recently-commissioned ITC Kohenur, a luxury property in Hyderabad, continued to receive excellent response from discerning guests, raising the bar of service excellence.
The company obtained possession of Park Hyatt Goa Resort and Spa in September 2018. The luxury beach resort commenced operations in mid-October 2018 as ITC Grand Goa, Resort and Spa.
The business made steady progress during the quarter in the construction of ITC Hotels in Kolkata and Ahmedabad and WelcomHotels in Guntur and Bhubaneswar.
The business leveraged market opportunities in wheat, pulses, oilseeds and spices, resulting in robust growth in revenue during the quarter.
However in the leaf tobacco vertical, pressure on legal cigarette industry volumes, lower offtake by customers and lower export incentives weighed on segment results.
The deep rural linkages and agri-commodity sourcing expertise resident in the agri business, including value-addition through identity preservation, traceability and certification are a critical source of competitive advantage for the company.
The business continues to leverage its wide geographical sourcing network, multiple sourcing models and customised infrastructure towards meeting the growing requirements for Aashirvaad atta and deliver substantial savings to the system through efficient logistics management and other cost-optimisation initiatives.
Similarly, the business sources high-quality fruit pulp for B Natural through its extensive sourcing network and associated infrastructure in key growing areas in the country, while also enabling migration to not from concentrate fruit pulp sourced from Indian farmers.
The business continues to step up initiatives in the area of value-added agriculture to create new vectors of growth by leveraging its agri-commodity sourcing and processing expertise and the strong distribution network of the company.
These include the launch of packaged prawns, super safe spices, fresh fruits and vegetables and dehydrated onions under the ITC Master Chef and Farmland brands over the last 12 months.
During the quarter, the business forayed into the frozen snacks category in the retail segment with the launch of an exciting array of products, comprising 10 variants of vegetarian and non-vegetarian snacks under the ITC Master Chef brand.
The product range is currently available in Bengaluru, Chandigarh and Ludhiana, and plans are afoot to rapidly scale up presence in the ensuing months.