ITC weathers cost storm, profit tops estimates | Stock Market News

New Delhi: ITC Ltd’s net profit for the December quarter topped market estimates, even as the company faced escalation in costs of key input materials such as leaf tobacco and edible oil, among others.

The maker of Gold Flake cigarettes and Bingo chips reported a 1.18% rise in standalone net profit to ₹5,638.25 crore in the third quarter, up from ₹5,572.07 crore in the year-ago period, and topping the ₹5,200-crore estimate of 18 analysts in a Bloomberg survey.

In a filing to the stock exchanges, the company lauded the Union budget 2025 for its proposals that address areas such as employment and employability, augmenting physical, digital and social infrastructure, strengthening MSMEs, tackling climate emergency, promoting next-generation agriculture and improving the ease of doing business.

“These measures will go a long way in securing sustainable and inclusive growth for the Indian economy in the years to come,” the company said in the filing.

Meanwhile, standalone Q3 revenue from operations grew 8.4% to ₹18,290.24 crore from ₹16,864.34 crore in the same quarter of FY24, led by growth in the company’s agri business, hotels and cigarettes.

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“Overall ITC numbers are in line with our estimates,” said Abneesh Roy, executive director & head of research committee, Nuvama Institutional Equities.

The company said in the statement that India’s near-term growth momentum has moderated with slower growth in investments, sticky food inflation, persistent weakness in urban consumption, and a broad-based slowdown in industry growth even as services remain resilient.

“Notwithstanding the near-term challenges, India’s economic outlook remains bright with the country continuing to be the fastest growing major economy in the world with significant headroom for growth over the medium and long-term,” it added.

Segment-wise performance

The company’s FMCG business segment revenue grew 4% year-on-year (y-o-y) to ₹5,418 crore. It reported “severe” inflationary pressures in prices of edible oil, wheat, maida (refined wheat flour), potato, cocoa, packaging inputs, etc. This was partially mitigated through focused cost-management initiatives, calibrated pricing actions and premiumisation, the company said.

“Competitive marketing investments were sustained during the quarter despite short-term inflationary pressures towards supporting growth and market standing. Competitive intensity continues to remain high (including from local players) in certain categories such as noodles, snacks, biscuits and popular soaps,” it added.


The company saw “strong” performance in its premium FMCG portfolio and alternate channels.

Cigarette segment revenue was up 7.7% y-o-y to ₹8,136.29 crore. The company faced sharp cost escalation in leaf tobacco that was partly mitigated through improved mix, calibrated pricing action and focused cost management initiatives. “Cigarette volume growth strong at 6% y-o-y, ahead of expectations,” said Roy of Nuvama.

“The Union Budget 2025 has proposed certain amendments to the Central Goods and Services Tax Act, enabling a Track and Trace mechanism which will strengthen the efforts of enforcement agencies towards controlling illicit cigarette trade. 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,” the company added.

Expenses during the quarter jumped 11.79% to ₹12,831.25 crore y-o-y, while Ebitda (earnings before interest, taxes, depreciation and amortization) was up 3% y-o-y.

ITC’s board has recommended interim dividend of ₹6.50 per share for the financial year ending 31 March 2025.

Agriculture business segment revenue was up 9.7% y-o-y led by leaf tobacco and value-added agri exports. “Value-added agri portfolio recorded strong growth driven by coffee exports,” the company added.

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Additionally, the company’s hotels business demerged into ITC Hotels Limited (ITCHL) with effect from 1 January 2025. The business reported 14.6% y-o-y jump in quarterly revenue at ₹922 crore on a high base. Consequently, the hotels business has been reported as ‘discontinued operations’ in the financial results for the quarter and nine months ended 31 December 2024 in line with applicable Indian Accounting Standards.

Meanwhile, the company expects rural markets to aid consumption going forward, pointing to improving agri terms-of-trade, healthy kharif output and improvement in rabi sowing. It added that there are signs of recovery in urban demand as well.

“Anticipated moderation in inflation, uptick in government spending and private investments, and the Government’s thrust on public infrastructure and the rural sector augur well for boosting economic activity and a pick-up in consumption demand,” the company said in its filing.