ITC Q3 net slips 7% to ₹5,013 cr. as input costs surge

Fast Moving Consumer Goods (FMCG) major ITC Ltd. consolidated net profit for the third quarter ended December 31 slid 7% year-on-year to ₹5,013 crore impacted by a sharp escalation in input cost.

Consolidated revenue grew 8% to ₹20,350 crore, the company said.

The board has recommended an interim dividend of ₹6.50 per share for FY25. The record date will be February 12.

It was a resilient performance amidst a subdued demand environment and sharp escalation in input cost, the company said in a filing with stock exchanges.

Revenue growth was driven by agri-business, hotels and cigarettes. The company said it witnessed sharp cost escalation in key input materials (edible oil, wheat, potato, leaf tobacco, wood etc.) during the quarter.

The hotels business was demerged into ITC Hotels Ltd. with effect from January 1.

FMCG revenue grew 4% amid muted demand conditions. Cigarette segment revenue rose 8.1% while agri-business saw a revenue growth of 9.7% YoY led by leaf tobacco and value added agri products.

Paperboards, paper and packaging segment remained impacted due to low-priced Chinese and Indonesian supplies in global markets, including in India, soft domestic demand conditions and an unprecedented surge in wood prices, the company said.

It was the best ever quarterly performance by the hotels business which reported a strong growth of 14.6% in revenue on a high base, it added.

The board recommended for the approval of members, a limit of 2% of the issued and subscribed share capital of the company to be earmarked for issue of shares from time to time under a new Employee Stock Appreciation Rights Scheme.

Meanwhile, ITC Ltd. has signed definitive agreements for the acquisition of 100% stake in Prasuma, which is into frozen, chilled and ready-to-cook foods space over a period of three years. The first tranche of 43.8% stake will be acquired upfront for ₹131 crore and balance stake will be acquired, in tranches by June, 2028, the company said in a statement

This investment is in line with the ‘ITC Next’ strategy articulated by chairman Sanjiv Puri, that focusses on building a future-ready portfolio of products that serves evolving consumer needs, the company said.

Commenting on this acquisition, Hemant Malik, wholetime director, ITC Ltd., said , “This investment reaffirms our commitment to building future-facing, best-in-class, innovative portfolios.”