Shares of ITC Ltd. rose over 3% after the diversified conglomerate released its financial results for the quarter ending Sept. 30, 2024. The company reported a net profit of Rs 5,078.34 crore for Q2 FY25, a 3% rise year-on-year.
Despite the profit growth, ITC’s operating margin came under pressure, hitting its lowest level in nearly three years. The company’s operating margin contracted by 470 basis points to 32.8%, missing analysts’ expectations by approximately 4 percentage points. This margin decline is the lowest recorded since Q2 of the financial year ending March 2022, when it stood at 32.5%, according to data compiled by NDTV Profit via Bloomberg.
ITC attributed these challenges to a combination of factors, including subdued demand conditions, unusually heavy rainfall in various parts of the country, high food inflation, and a sharp increase in certain input costs.
Even as the net profit rose in the July-September period, it fell short of the Rs 5,154-crore consensus estimate of Bloomberg analysts.
Revenue increased by 16% year-on-year to Rs 19,327.7 crore, compared to Rs 16,550 crore in the same quarter last year. That included a 6.79% increase in cigarette revenue, which rose to Rs 8,177 crore from Rs 7,657 crore a year ago.
Revenue from FMCG, excluding cigarettes, increased by 5.4% to Rs 5,577 crore from Rs 5,291 crore in the corresponding period last year. The Bloomberg analysts had pegged the top line at Rs 18,068 crore.
Content retrieved from: https://www.ndtvprofit.com/markets/itc-share-price-gains-after-q2-profit-rise.
