Nifty 17469.75 (1.71%)
Sensex 58649.68 (1.76%)
Nifty Bank 37284.7 (1.82%)
Nifty IT 35959.05 (1.95%)
Nifty Financial Services 18284.95 (1.70%)
Adani Ports 761.40 (2.24%)
Asian Paints 3108.50 (2.58%)
Axis Bank 697.10 (1.47%)
B P C L 391.15 (0.86%)
Bajaj Auto 3332.05 (1.39%)
Bajaj Finance 7361.50 (3.64%)
Bajaj Finserv 17621.65 (3.00%)
Bharti Airtel 715.15 (2.33%)
Britannia Inds. 3575.75 (2.92%)
Cipla 897.95 (0.98%)
Coal India 150.90 (0.17%)
Divis Lab. 4604.95 (-0.43%)
Dr Reddys Labs 4570.70 (1.11%)
Eicher Motors 2505.55 (1.37%)
Grasim Inds 1716.25 (1.82%)
H D F C 2853.00 (1.26%)
HCL Technologies 1171.60 (1.91%)
HDFC Bank 1553.80 (1.84%)
HDFC Life Insur. 686.40 (-1.15%)
Hero Motocorp 2490.65 (1.17%)
Hind. Unilever 2340.60 (0.82%)
Hindalco Inds. 457.45 (3.38%)
I O C L 120.40 (-0.17%)
ICICI Bank 753.40 (2.55%)
IndusInd Bank 945.30 (2.01%)
Infosys 1753.35 (2.44%)
ITC 224.95 (1.95%)
JSW Steel 672.95 (1.86%)
Kotak Mah. Bank 1920.45 (-0.86%)
Larsen & Toubro 1825.05 (1.50%)
M & M 840.75 (1.79%)
Maruti Suzuki 7434.90 (3.46%)
Nestle India 19479.10 (0.70%)
NTPC 127.25 (1.52%)
O N G C 148.40 (1.71%)
Power Grid Corpn 204.80 (-0.49%)
Reliance Industr 2418.10 (1.52%)
SBI Life Insuran 1169.50 (0.89%)
Shree Cement 26106.90 (1.40%)
St Bk of India 491.55 (3.12%)
Sun Pharma.Inds. 757.55 (1.86%)
Tata Consumer 772.15 (1.51%)
Tata Motors 493.90 (2.51%)
Tata Steel 1173.00 (2.11%)
TCS 3626.90 (1.18%)
Tech Mahindra 1604.80 (1.79%)
Titan Company 2405.55 (1.05%)
UltraTech Cem. 7423.95 (1.71%)
UPL 728.10 (0.16%)
Wipro 641.70 (1.47%)
by 5paisa Research Team 29/10/2021

ITC's 2QFY22 performance was driven by recovery in cigarette volumes and strong performance in the paperboard segment. Overall net sales stood at Rs. 1,27,310mn grew 13.8% YoY and 4.2% QoQ, PAT stood at Rs. 36,972mn, grew 14.4% YoY and 22.7% QoQ, and EBITDA stood at 13.7% (down by 6 bps) YoY and 15.6% (up by 357 bps) QoQ.

Cigarette net segment grew 10.3% with volume growth of 10% on a low base, FMCG sales grew 6% on a high base of 15% and Paperboard segment sales grew strongly by 25%.

The cigarette segment saw a faster recovery in demand and volumes in 2nd wave compared to 1st wave with exit cigarette volumes were back to pre-COVID levels. The EBIT of the segment grew by 10%. Easing restrictions and increasing mobility helped increase volumes on a sequential basis. However, East India and Kerala did not contribute much to this recovery growth. In the quarter, the company launched differentiated offerings like Classic Connect, Gold Flake Neo Smart Filter, Gold Flake Kings Mixpod, American Club Smash, Wave Boss and Flake Nova and 5s pack of Gold Flake Premium, Capstan Special and Flake Mint in line with evolving consumer preferences and in focus markets, it launched modernised and refreshed packs of Flake Excel, Wills Navy Cut Filter, Berkeley Hero.

Snacks, confectionery, and beverages performed well while discretionary or out-of-home categories recorded strong growth in the FMCG segment. Despite moderate growth witnessed in staples and convenience foods, the revenue generated was above pre-COVID levels. Input cost inflation impacted the margins which declined by 40bps to 10%, however, FMCG EBITDA remained unhindered and grew by 2%. EBIT margin remained stable at 6.7% on account of operating leverage and lower depreciation. Notably, availability in rural markets was enhanced through the scale-up of the stockist network (2x of last year), market coverage and direct outlet servicing at 1.4x and 1.1x of last year. 

Exports and cartons segment were the key growth drivers of the Paperboard segment. With the aid of in-house manufacturing of pulp, the margins remained stable even with input cost inflation in play. Paperboard segment EBIT grew 22% but margins contracted by 20bps to 22.4%. Despite shortage in availability of shipping containers/port congestion faced by Agri segment, EBIT grew 15% driven by favourable mix but revenue declined by 7%. Hotel revenue was back to 4QFY21 levels with easing restrictions. The strong recovery in occupancy levels and ARRs, but remained below pre-COVID levels.

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