Shares of ITC Ltd advanced nearly 3% on Friday following the release of its fourth-quarter financial results, which showed a modest 2% year-on-year rise in net profit. The company’s performance was driven by a recovery in rural consumption, bolstered by favorable monsoon conditions, and stable growth in its dominant cigarette business. Despite headwinds in urban discretionary spending due to inflation, ITC reported gains across its key segments. Excluding the one-time gain from the recent demerger of its hotel division, ITC’s earnings demonstrated underlying strength in its core operations. Investors responded positively, reflecting confidence in the company’s diversified portfolio and rural market resilience.
ITC Stock Gains on Strong Quarterly Performance
Shares of ITC Ltd climbed 2.81% on the Bombay Stock Exchange (BSE) to close at Rs. 438.10, while on the National Stock Exchange (NSE), the stock advanced 2.83% to Rs. 438.20. The market’s reaction came after the conglomerate reported stable growth in net profit for the January–March quarter of FY 2024–25, signaling investor confidence in the firm’s long-term fundamentals.
Quarterly Earnings: Marginal Profit Rise, Solid Operational Momentum
ITC’s standalone net profit before tax and exceptional items for the March quarter stood at Rs. 6,416.85 crore, a 2% increase from Rs. 6,287.57 crore in the same period last year. These figures exclude the Rs. 15,179 crore one-time gain resulting from the demerger of ITC Hotels, which was finalized earlier in the fiscal year.
The company credited its performance to a revival in rural demand—primarily attributed to favorable monsoon conditions—which partially offset urban consumption challenges caused by persistent inflationary pressures.
Segment Highlights: Cigarettes and FMCG Drive Growth
The cigarette business, a major revenue contributor for ITC, recorded a 4% year-on-year increase in revenue to Rs. 5,118 crore. Despite regulatory scrutiny and public health concerns, this segment continues to anchor the company's profitability.
The fast-moving consumer goods (FMCG) segment—which includes leading household brands such as Aashirvaad, Sunfeast, and Bingo—reported a 3.7% uptick in revenue, reaching Rs. 5,495 crore. This growth signals sustained brand loyalty and market reach, particularly in non-urban areas.
Financial Metrics: Revenue and Profit Margins Hold Steady
ITC's gross revenue for Q4 rose 9.2% year-on-year to Rs. 18,266 crore. The company also posted a 2.5% increase in earnings before interest, taxes, depreciation, and amortization (EBITDA), which reached Rs. 5,986 crore. These metrics suggest healthy operational efficiency and the capacity to maintain profitability amid fluctuating demand trends.
For the full fiscal year, ITC reported a net profit of Rs. 20,092 crore on gross revenue of Rs. 73,465 crore. This marks an improvement from Rs. 19,910 crore in profit and Rs. 66,657 crore in revenue during the previous financial year. Full-year revenue climbed 10.2%, while EBITDA rose by 2.3%.
Strategic Outlook: Positioning for Growth in a Diversified Economy
While the demerger of its hotel business added a significant one-time gain, ITC’s core performance underscores the company’s resilience and adaptability. By continuing to diversify its revenue streams—particularly in FMCG and agribusiness—while maintaining a dominant position in cigarettes, ITC is strategically positioned to weather macroeconomic fluctuations.
Looking forward, the company is expected to benefit from rural economic stabilization and a broadening consumer base. Shareholder optimism reflects the view that ITC’s well-rounded portfolio and steady operational performance make it a compelling player in India’s fast-evolving consumer landscape.
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