India's ITC beats Q1 profit view on strong FMCG demand, drop in expenses (updated)

Varun Beverages

14/08/2023 13:06

(Updates with details throughout)
       Aug 14 (Reuters) - India's ITC Ltd  ITC.NS  reported a
bigger-than-expected rise in first-quarter profit on Monday,
buoyed by strong demand in the FMCG segment and as expenses
fell.
    The cigarettes-to-hotels conglomerate's profit rose 17.6% to
49.03 billion rupees ($590.28 million) in the quarter ended June
30 from 41.69 billion a year earlier.
    Analysts, on an average, expected a profit of 48.29 billion
rupees, according to Refinitiv IBES data.
    ITC's revenue from operations fell more than 7% to 169.95
billion rupees, dragged by a 24% fall in its agricultural
business. 
        The cigarettes business, which houses the Classic and
Gold Flake brands, however, saw a 13% jump in revenue.
    Its consumer goods segment that owns brands like Aashirvaad,
Bingo and Yippie reported steady growth during the quarter,
while improved out-of-home consumption drove demand for packaged
foods, said analysts.
    Sales in the fast-moving consumer goods segment, which
includes its foods and stationery businesses, rose more than
16%. Total expenses fell by 14.7%.
    Revenue from the hotels business, which received the
approval for demerger into a separate company during the day,
saw a more than 8% jump with a revival in domestic tourism and
heightened demand from corporate bookings.
    ITC Hotels will operate as an independent
hospitality-focused listed entity, the company in a statement. 
        In consideration of the demerger, each shareholder will
receive one share of ITC Hotels for every 10 shares held in ITC.
  
        An indicative timeline for the listing of ITC Hotels is
about 15 months, the company said.
    ITC's shares closed 0.1% up ahead of results, having climbed
nearly 18.5% during the June quarter.
    Peers Dabur India Ltd  DABU.NS  cooking oil maker Marico Ltd
 MRCO.NS  and Pepsi bottler Varun Beverages Ltd  VARB.NS 
reported surging profit as easing inflation propped demand.
However, Dove soapmaker Hindustan Unilever Ltd  HLL.NS  reported
a smaller-than-expected increase in profit.

($1 = 83.0620 Indian rupees)

 (Reporting by Ashna Teresa Britto; Editing by Sohini Goswami)
 ((AshnaTeresa.Britto@thomsonreuters.com;))