(HT)
ITC Ltd on Thursday predicted India’s consumption engines to keep firing as inflation cools, interest rates fall, and rain clouds gather, following a similar prognosis by industry leader Hindustan Unilever Ltd.
Consumption spending is expected to rise steadily as a good monsoon powers a continued rural recovery, the maker of Bingo chips and Gold Flake cigarettes said; alongside, lower inflation and the recent income tax cut are expected to boost disposable incomes in towns and cities. The company expects India’s macro-economic variables to remain stable in the year ahead.
“The cumulative impact of pick-up in government capex in the second half of FY25 and front-loading of capex outlay in FY26, along with interest rate cuts and liquidity support from RBI, would also be supportive of growth,” ITC said in a filing.
India’s second-largest consumer goods maker reported a 289% jump in March quarter profit, thanks to an exceptional gain from the demerger of its hotels business. Profit touched ₹19,561.57 crore, up from ₹5,020 crore a year earlier. Excluding profit from exceptional items, profit stood at ₹4,875 crore, up 0.77%. ITC’s hotels demerger took effect on 1 January this year.
A Bloomberg survey of 22 analysts had estimated ITC to report standalone March revenue of ₹16,979 crore, while 18 analysts estimated a net profit of ₹4,942 crore.
“Adjusted profit after tax came in line with our but 2.5% below consensus estimates,” Abneesh Roy, executive director, Nuvama Institutional Equities. Roy said revenue and Ebitda were largely in line with Nuvama’s estimates. Ebitda is short for earnings before interest, tax, depreciation, depreciation and amortization.
Standalone revenue from operations in the fourth quarter grew 9.4% to ₹18,494.06 crore, up from ₹16,907.18 crore in the same quarter of FY24. Expenses grew 12.7% to ₹12,872.66 crore.
On 25 April, HUL had said that this is “a good moment” for the consumer packaged goods industry, as India’s macros turn favourable. “Monsoons have been good, projections have been decent, reservoirs are full, and agri output is strong,” chief executive officer and managing director Rohit Jawa said at a post-earnings meet.
For the full year FY25, ITC recorded overall profit after tax (including profit from discontinued operations) of ₹35196 crore, up 72.3% year-on-year. Standalone revenue from operations grew 10.31% to ₹74,236.07 crore. Earnings per share for the year stood at ₹16.07, against the previous year’s ₹15.98.
The ITC board recommended a dividend of ₹7.85 per share for FY25. Together with the interim dividend of ₹6.50 paid on 7 March, the total dividend for the year totals to ₹14.35 per share.
During the quarter, ITC’s FMCG business reported a 3.6% increase in revenue to ₹5494.63 crore, while profit decreased 28%.
