ITC Ltd posted a modest 2% increase in standalone net profit for the fourth quarter of FY2024-25, driven by a resurgence in rural consumption and consistent performance in its core cigarette segment. The company’s gross revenue rose 9.2% year-on-year to Rs 18,266 crore, while EBITDA edged up 2.5% to Rs 5,986 crore. Despite inflationary pressures and competitive challenges in segments such as notebooks and paper, ITC’s strategic portfolio premiumisation and targeted acquisitions, including in FMCG and pulp and paper, underpin its growth trajectory. The board declared a final dividend, underscoring confidence in long-term shareholder value.
Financial Performance Overview
In the quarter ended March 31, 2025, ITC Ltd reported a standalone net profit before tax and exceptional items of Rs 6,416.85 crore, marking a 2% increase from Rs 6,287.57 crore in the prior-year period. This performance excludes the one-time Rs 15,179 crore gain from the recent demerger of ITC Hotels, which took place in January 2025.
Gross revenue for the quarter expanded by 9.2% to Rs 18,266 crore, supported by broad-based growth across segments. Earnings before interest, tax, depreciation, and amortization (EBITDA) rose by 2.5% to Rs 5,986 crore, reflecting effective cost management amid inflationary headwinds.
For the full fiscal year, ITC reported a net profit of Rs 20,092 crore on revenue of Rs 73,465 crore, compared to Rs 19,910 crore profit on Rs 66,657 crore revenue in FY2023. The company’s gross revenue increased 10.2%, while EBITDA recorded a 2.3% rise.
Segmental Highlights: Cigarettes and Consumer Goods
The cigarette business, ITC’s largest revenue contributor, delivered robust growth with revenue rising 7% to Rs 5,118 crore in Q4 and showing a 7% increase over the full fiscal year. Strategic interventions to combat illicit trade and focus on premium and differentiated offerings bolstered volume growth and reinforced market leadership.
The consumer goods portfolio, comprising well-known brands such as Aashirvaad, Sunfeast, and Bingo, reported a 3.7% revenue increase in Q4 to Rs 5,495 crore, with a full-year growth of 5%. Key drivers included staples like atta and spices, as well as snacks, frozen foods, dairy products, and premium personal care items. The company’s homecare and agarbatti segments also contributed positively.
Challenges in Other Divisions
The notebooks segment faced pressure from heightened competition and aggressive pricing by regional players. Similarly, the paperboards, paper, and packaging businesses encountered challenges stemming from subdued domestic demand, competition from lower-priced Chinese and Indonesian imports, and sharp rises in wood costs. Inflationary pressures were pronounced in raw materials such as edible oils, wheat, maida, potato, cocoa, and packaging components.
ITC responded with focused cost containment, portfolio premiumisation, and calibrated price adjustments to mitigate these challenges.
Hotel Business and Strategic Acquisitions
Following the demerger, ITC Hotels recorded its highest-ever revenue and operating profits, with a profit before exceptional items and tax of Rs 573 crore for the nine months ending December 31, 2024, compared to Rs 445 crore in the previous year.
In line with its ITC Next strategy, the company pursued several value-accretive acquisitions in the FMCG sector, including Sresta Natural Bioproducts (24 Mantra Organic Foods), Mother Sparsh Baby Care, and Ample Foods (Prasuma & Meatigo). These moves are designed to strengthen ITC’s presence in high-growth, future-oriented markets.
Additionally, ITC entered into an agreement to acquire the pulp and paper undertaking of Aditya Birla Real Estate Limited (Century Pulp and Paper). This acquisition is expected to significantly scale operations, enhance economies of scale, and provide locational advantages for raw material access and customer servicing, boosting resilience across economic cycles.
Dividend and Outlook
Reflecting confidence in ongoing growth and profitability, the ITC board declared a final dividend of Rs 7.85 per share. Alongside the interim dividend of Rs 6.50 paid earlier in the year, total dividends for FY2024-25 amount to Rs 14.35 per share, up from Rs 13.75 per share in FY2023.
Looking ahead, ITC’s diversified portfolio, strategic investments, and rural demand revival position the company to sustain steady growth despite macroeconomic headwinds and competitive pressures.
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