ITC shares jump 4.6% in weak market; Street cheers conglomerate's Q2 results

The stock jumped as much as 4.6% to ₹493.50 on the NSE, a day after the company posted a 1.8% increase in consolidated net profit to ₹5,054.43 crore for the quarter.

The company posted a consolidated net profit of ₹4,964.52 crore in the year-ago period. 

ITC's revenue from operations jumped 15.62% to ₹22,281.89 crore in the September quarter. It was ₹19,270.02 crore in the corresponding quarter of the previous fiscal.

The total income of ITC, which includes other income, rose 14.86% to ₹22,897.85 crore. It was ₹19,934.9 crore a year ago.

The company's agribusiness segment's revenue jumped 47% YoY, led by leaf tobacco and value-added agri products.

The hotel segment, too, delivered a strong performance on a high base. The segment's revenue grew 12.1% YoY. 

EBITDA margin expanded 70 bps YoY, driven by higher RevPAR (revenue per available room), operating leverage, and strategic cost management.

ITC said the Indian economy continues to demonstrate macro-economic stability even as high-frequency indicators such as automobile sales, bank credit & personal loan growth, credit card transaction volumes, GST collections, merchandise exports growth, manufacturing PMI, etc. pointed to a deceleration in the pace of economic activity during the quarter.

The quarter also witnessed excessive rains in August and September and a resurgence in food inflation, which led to CPI hitting a 9-month high. The combination of these factors, along with inflationary trends in commodity prices, weighed on consumption expenditure and the FMCG sector. 

"Despite the near-term headwinds, the Indian economy continues to be extremely resilient amidst a sluggish global economy. A favourable demographic profile, increasing affluence, rapid urbanisation, and accelerated digital adoption represent some of the key structural drivers of the growth of the Indian economy," the company added. 

Expectations of good crop output, anticipated moderation in inflation, improving agricultural terms of trade, and the government's thrust on public infrastructure and the rural sector augur well for a pickup in consumption demand, it added.