ITC’s Q4 operating sales grew 13.3 percent YoY (year on year), buoyed by strong top line growth across segments. A key takeaway is better than expected volume growth in the cigarette business, which is estimated at 7-8 percent.
EBITDA margins, however, contracted by 103 bps on account of higher cost of goods sold and rise in employee costs.
Segmental margins in cigarette and hotels businesses were lower than last year while there was a significant improvement in margins for FMCG (others) and paperboard business. The company highlighted that FMCG (others) EBITDA margin is 7 percent as against 5.7 percent in Q4 FY18 – still a long way off the frontline FMCG benchmarks, but fast improving.
While net profit has grown nearly 19 percent, this includes a net gain on restructuring of the Lifestyle retailing business, consisting of sale proceeds of John Players trademark/copyright amounting to Rs 70.5 crore.
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