Standalone Financial Results for the Quarter and Year ended 31st March, 2024

May 23, 2024Highlights
• Board recommends Final Dividend of Rs. 7.50 per share. Including Interim Dividend of Rs. 6.25 per share paid on 27th February, 2024, Total Dividend for the financial year ended 31st March, 2024 amounts to Rs. 13.75 per share (FY23: Ordinary Dividend of Rs. 12.75 per share and Special Dividend of Rs. 2.75 per share).
• Full Year: Gross Revenue at Rs. 69446 cr., up 6.8% (ex-Agri Business) and PAT at Rs. 20422 cr. up 8.9% YoY
• Q4: Gross Revenue (ex-Agri Business) up 6.0% YoY; Highest ever Q4 PBT at Rs. 6534 cr. (bei)1
• 12 Hotel properties of the Company have received LEED Zero Carbon certification (first 12 in the world) and 4 Hotel properties have received LEED Zero Water certification (first 4 in the world).
• ITC sustained its ‘AA’ rating by MSCI-ESG – the highest amongst global tobacco majors. During the year, the Company entered the prestigious ‘A List’ for Water security by CDP achieving the highest ‘A’ rating ‘Leadership Level’ (Asia and Global average of ‘C’) and retained its ‘A-’ rating ‘Leadership Level’ (Asia and Global average of ‘C’) for CDP Climate.
• Water stress, a critical fallout of climate change, is being systematically managed by the Company’s integrated water stewardship approach. Till date, 7 units of the Company have achieved Platinum level certification, the highest recognition for water stewardship, under the Alliance for Water Stewardship Standard (AWS).
PERFORMANCE HIGHLIGHTS
• Resilient performance in FMCG – Others Segment amidst marked slowdown in consumption
– Full Year Segment Revenue and Segment PBIT up 9.6% and 29.4% YoY respectively; margins expanded by 130 bps YoY
– 2-yr CAGR: Segment Revenue +14.5%, Segment PBIT +38.8%
– Q4 Segment Revenue up 7.2% on a high base and Segment PBIT up 15% on comparable basis (base quarter
included certain fiscal incentives pertaining to previous periods); margins expanded 60 bps YoY on
comparable basis
– 2-yr CAGR: Segment Revenue +13.1%, Segment PBIT +42.2%
– Staples, Biscuits, Snacks, Dairy, Homecare, Agarbatti drive growth
– Education & Stationery Products Business continues to witness strong traction
• Cigarettes Segment witnesses consolidation of volumes on a high base after a period of sustained growth momentum
– Full Year Net Segment Revenue and Segment PBIT up 7.1% and 6.5% YoY respectively
– 2-yr CAGR: Net Segment Revenue +13.5%, Segment PBIT +13.3%
– Q4 Net Segment Revenue and Segment PBIT up 7.0% and 5.0% YoY respectively
– 2-yr CAGR: Net Segment Revenue +10.3%, Segment PBIT +9.4%
– Net Segment Revenue and Segment PBIT up 5.2% and 4.1% respectively sequentially amidst subdued
demand conditions in the overall consumption space.
– Market standing reinforced through focused portfolio/market interventions and agile execution.
Differentiated and premium offerings continued to perform well.
– Sharp escalation in leaf tobacco prices and other inputs, along with increase in taxes were largely mitigated through improved mix, strategic cost management and calibrated pricing.
• Record high performance in Hotels Segment
– Full Year Segment Revenue and Segment PBIT up 15.6% and 39.1% YoY respectively; Segment EBITDA margin up 295 bps YoY to 35.1%
– Q4 Segment Revenue and PBIT up 15% and 34% YoY respectively on a high base; Segment EBITDA margin up 340 bps YoY to 38.2%
– Margin improvement driven by higher RevPARs, structural cost interventions and operating leverage
– Demerger update: Post obtaining no-objection from stock exchanges, Scheme of Arrangement for demerger (‘the Scheme’) was filed with National Company Law Tribunal (NCLT). NCLT has directed convening a meeting of shareholders of ITC on June 6, 2024 to consider and approve the Scheme.
• Agri Business Segment impacted by trade restrictions on agri commodities; Segment Revenue de-grew 13.1% and 13.4% YoY in FY24 and Q4 respectively
– Strategic portfolio (comprising value-added agri products) and leaf tobacco Revenues up 19% YoY in Full Year and 18% YoY in Q4
– Geopolitical tensions and climate emergencies have led to concerns over food security and food inflation globally. To ensure India remains food secure, Government has had to impose trade restrictions on agricommodities; consequently limiting business opportunities for the Agri Business. The Company continues to engage with farmers to build resilience in agrarian practices against extreme weather events; the Company’s Climate Smart Agriculture programme covers over 29 lakh acres and about 7.5 lakh farmers in the country
– Strong customer relationships and agile execution in Leaf Tobacco & Value Added Agri products continue to drive growth in these categories
– The state-of-the-art facility2 to manufacture and export Nicotine and Nicotine derivative products has been commissioned. Customer trials underway; export shipments expected to be scaled up progressively.
• Paperboards, Paper and Packaging Segment remains impacted by low priced Chinese supplies in international markets (including India), muted domestic demand, surge in wood cost and high base effect
– Demand environment remains subdued across domestic and global markets
– Subdued realisations and surge in domestic wood prices exerted pressure on margins; structural advantages of an integrated business model, Industry 4.0 initiatives, strategic investments in High Pressure Recovery Boiler and proactive capacity augmentation in Value Added Paperboards aided in partly mitigating pressure on margins
– Capacity utilisation of Nadiad packaging and printing unit in Gujarat progressively ramped up.
– The state-of-the-art premium Moulded Fibre Products manufacturing facility3 commissioned in Mar’24.
While consumption demand remained subdued in Q4 FY24, improving macro-economic indicators, prospects of a normal monsoon and green shoots witnessed in rural demand recovery after several quarters, augur well for revival in consumption demand in the near term. With its focus on consumer centricity, purposeful innovation, agility, and execution excellence, the Company remains confident of navigating the short-term challenges and creating sustained value for all stakeholders.
MACRO ECONOMIC CONTEXT
The global economy witnessed another year of deceleration in growth to 3.2%4 in 2023 (Vs. 3.5% in 2022) with the slowdown being largely attributable to slowdown in Advanced Economies, particularly the Euro Area and UK, and structural weakness in the Chinese economy. India remained a relatively bright spot amidst the global slowdown,
2 Set up by ITC IndiVision Ltd. – a wholly owned subsidiary of the Company
3 Set up by ITC Fibre Innovations Limited – a wholly owned subsidiary of the Company
4 As per IMF WEO April 2024
recording robust Real GDP growth of 7.6% in FY24 (as per MOSPI estimates). Growth was primarily driven by Fixed Investments led by Government’s thrust on infrastructure creation and household investments in real estate. Private Consumption, on the other hand, grew at 3.0% – its slowest pace in two decades. The weakness in consumption was reflected, inter alia, in the muted volume growth of the FMCG sector (FY24 volume growth appx. 3% Vs. 7% p.a.average in the pre-pandemic period). While Industry and Services sectors grew by 9.0% and 7.5% respectively, growth in the Agri sector slowed to 0.7%, with adverse weather events impacting crop output.