Thread by @MlnDollarMinds

#ITC - business update

3QFY21

Time for thread 👇🏻👇🏻👇🏻

@dmuthuk

(1/n)

Revenue was flat yoy at Rs117.8 bn. EBITDA declined 7% yoy to Rs42.8 bn.

(2/n)

Cigarette * Cigarettes net revenue declined 7.6% yoy and EBIT declined 8% yoy to Rs34.5 bn. Cigarette business witnessed sequential recovery led by enhanced mobility in metro/tier- 1 cities. Net declined 7.6% yoy during the quarter.

(3/n)

Cigarette contd ... ITC enhanced its leadership position with competitive market offerings, premium-end innovation, product refresh, launch of small packs, and distribution augmentation (addition of stockiest, grocery outlets and rural/semi-urban markets).

(4/n)

FMCG revenue grew 8% yoy (+11% LFL; excluding lifestyle and stationery business), EBIT grew 93% yoy. EBIT margin expanded 260 bps yoy to 5.8% (down 60 bps qoq). FMCG EBITDA margin stood at 9.2%.

(5/n)

FMCG contd ... FMCG business witnessed continued heightened demand for health/hygiene, and immunity boosting products (moderating sequentially) while staples/convenience foods moderated with broadening consumer purchase basket and lower in-home food consumption.

(6/n)

Fmcg contd - OOH-linked categories witnessed good sequential improvement with double-digit yoy growth in snacks & recovery in deodorants & confectionary. Over 9MFY21, staples/convenience foods/health/hygiene products grew 23% yoy, discretionary/OOH segments declined 5%y/y

(7/n)

Fmcg contd ... Savlon brand registered ~Rs10 bn revenue over 9MFY2021 led by sanitizer, disinfectant sprays, wipes, and Savlon Hexa soap. Biscuits portfolio registered low-single digit revenue growth in 3Q.

(8/n)

Fmcg contd ... Rural markets continued the strong momentum and urban demand witnessed gradual recovery during the quarter. FMCG business witnessed robust traction in the online channel (~5% FMCG revenue contribution now).

(9/n)

Hotels segment reported 57% yoy revenue decline and EBIT loss of Rs673 mn. The segment registered good sequential recovery led by pick-up in weddings, getaways and healthcare/quarantine business. Leisure locations continue to witness strong demand.

(10/n)

Hotels business turned EBITDA positive in Dec-2020 month with strong focus on cost reduction and cash conservation. Welcomhotel Shimla was commissioned and Welcomhotel Port Blair was relaunched during the quarter.

(11/n)

Agri business registered 18% yoy revenue growth led by trading opportunities in rice, soya and wheat (for Aashirvaad Atta) and EBIT decline of 8% yoy.

(12/n)

Agri continued ... ITC leveraged its e-Choupal network to enhance direct procurement from farmers. Tobacco leaf exports were impacted by lower volumes and adverse crop/grade mix. Exports of value-added spices continue to see traction.

(13/n)

Paperboards, paper and packaging segment witnessed 5% yoy revenue decline with subdued domestic demand (liquor, publications, notebooks, wedding card segments) partially offset by growth in exports and 15% yoy EBIT decline.

(14/n)

Paper contd ... Speciality papers (linked to pharma & décor segments) saw good traction. Operational efficiencies helped partially mitigate weaker realization, adverse sales mix & operating leverage. Capex plans are tracking on schedule.

(15/n)

Better than expected performance in Cigarette business offset weakness in Other FMCG, Hotels & Paperboards segments. PBT stood at ₹48.5 bn down 6% yoy. Recurring PAT of ₹37bn was down 6% yoy & recurring EPS stood at ₹3/share. ITC declared interim dividend of ₹5/share.

16/16