ITC: Margin gains, FMCG revival potential triggers

For the fourth quarter of financial year 2024-25 (Q4FY25), FMCG giant ITC reported 9.6 per cent year-on-year (Y-o-Y) growth in revenues, with operating profit soaring 2.5 per cent and net profit by 0.8 per cent.

- DEVANGSHU DATTA

The big gains were made on the back of healthy volumes in the cigarette segment.

The FMCG topline grew 3.7 per cent Y-o-Y, but segment profit declined 28 per cent. The paperboards' segment profit declined 31 per cent despite a low base (profit was down 55 per cent in Mar '24 versus Mar '23). Inflationary pressure could continue to hurt margins.

ITC's gross revenue (excluding agri business) grew 7.2 per cent Y-o-Y. Operating profit grew 2.5 per cent Y-o-Y to ₹5,990 crore. Cigarette net revenues grew 6 per cent Y-o-Y while segment profit growth was 4 per cent Y-o-Y, with volume growth at 5 per cent. But segment margin was down 120 basis points.

The FMCG segment margin was 6.3 per cent, down 275 basis points Y-o-Y. The paperboard segment margin dropped 490 basis points Y-o-Y to 9.2 per cent.

Agri revenues grew 17.7 per cent and segment profit grew 25.9 per cent Y-o-Y. The recurring net profit was ₹4,870 crore was up 0.8 per cent Y-o-Y while net profit from discontinued operations was ₹14,690 crore, on account of gains on the hotels demerger.