Standalone Financial Results for the Quarter ended 30th June, 2020

Highlights

FMCG-Others Segment Revenue up 12.2% on a comparable basis [up 18.8% excl. Education and Stationery Products Business (ESPB)].

– Staples, Convenience Foods and Health & Hygiene products, representing around 75% of the portfolio (in base period excl. ESPB), recorded strong growth of 34%; Discretionary categories and those with higher ‘out-of-home’ consumption salience degrew by 25%, but are witnessing progressive normalisation with improved growth momentum.

– Company pivoted smartly to address emergent consumer needs in the health and hygiene segment; twelve innovative and relevant products with compelling value propositions launched in record time.

– Agility and responsiveness enabled expeditious resumption of manufacturing, supply chain, sales & distribution operations; strategic partnerships, innovative delivery models and enhanced usage of digital technologies supported efficient market servicing.

– ESPB remained impacted due to deferment of academic session across the country.

– Segment EBITDA up 42.4% to Rs. 257 crores notwithstanding incremental costs due to COVID-19, gestation and start-up costs of new categories/ facilities. Segment EBITDA margins up 170 bps.

Hotels Segment severely impacted with operations coming to a standstill due to restrictions on travel and hotel operations. Negative operating leverage weighed on segment profits; aggressive reduction in controllable fixed costs partly mitigated the impact.

Paperboards, Paper & Packaging Segment performance impacted by lower offtake from end-user industries; robust growth in exports partly mitigated the weak domestic demand environment.

– Swift resumption of business ahead of competition, strong dealer network and agility in servicing customer needs aided significant enhancement of market standing in the premium Value Added Paperboards segment.

Agri Business Segment Revenue up appx. 4% on the back of trading opportunities in oil seeds and rice.

– Leveraged e-choupal network to cater to surge in wheat requirements for Aashirvaad atta.

– Subdued demand for leaf tobacco in international markets and adverse business mix weighed on Segment Results.

Unprecedented disruptions in economic activity caused by nationwide lockdowns in the wake of COVID-19 pandemic weighed on the Company’s performance during the quarter. Gross Revenue stood at Rs.9435.61 crores representing a decline of 17% – Hotels, Cigarettes, ESPB and Paperboards & Packaging Businesses were impacted the most. FMCG-Others Segment delivered a strong performance driven by Staples, Convenience Foods and Health & Hygiene products, leveraging the strong equity of the Company’s brands and a robust portfolio of relevant and innovative products. Negative operating leverage and adverse business mix weighed on profits which was partially mitigated through extreme focus on cost reduction. Expenses for the quarter include incremental spends of Rs. 92 crores on CSR initiatives which were directed mainly towards combating the COVID-19 pandemic. Profit After Tax and Total Comprehensive income stood at Rs. 2342.76 crores (previous year Rs.3173.94 crores) and Rs.2337.03 crores (previous year Rs. 2960.93 crores) respectively. Earnings Per Share for the quarter was Rs. 1.91 (previous year Rs. 2.59).

Other than the Hotels segment, progressive normalisation was witnessed in the later part of the first quarter across all operating segments. The recent imposition of localized lockdowns in several parts of the country, however, are posing operational challenges and impacting the recovery momentum. The Company shall continue to closely monitor the situation and respond with agility to strengthen its market standing while sharply focusing on cost reduction measures.