Indian FMCG bellwether ITC Limited, on Wednesday, released its annual report and said that inflationary headwinds remain key monitorable for the fast-moving consumer goods industry.
The report reveals that the FMCG industry, as a whole, witnessed moderation in growth due to the subdued demand in rural markets, high inflation and high base effect in several categories like convenience foods and staples.
The company report also added that the FMCG industry, during FY22, witnessed a moderation in growth due to the subdued demand in rural markets and high inflation. Health and hygiene personal care products also saw demand volatility because of the varying intensity of the COVID-19 pandemic but remained significantly above pre-pandemic levels.
“The year saw an unprecedented increase in prices of key inputs such as edible oils, packaging materials, soap noodles, fuel, logistics, etc. which exerted considerable pressure on margins. This was mitigated by adopting a comprehensive approach across the value chain entailing sharp focus on cost management, portfolio premiumisation, competitive trade and marketing investments, fiscal incentives, supply chain agility and judicious pricing actions,” it said.
ITC’s annual report also revealed that its FMCG-Cigarettes segment rebounded during FY22 on the back of the normalisation of economic activity and the sales surpassed pre-pandemic levels in the latter half of the year.
ITC’s hotel segment also witnessed recovery which was driven by the increasing business travels, domestic leisure and wedding segments. However, it remains well below pre-pandemic levels.
“Pickup in revenues together with a relentless focus on cost management resulted in a positive swing of
ITC’s Agri-business segment, on the other hand, delivered a stellar performance with the segment’s revenue growing 28.7 per cent and results up 25.6 per cent. As per the report, this was driven by strong growth in wheat, rice, spices and leaf tobacco exports.
The company’s paperboards, paper and packaging segment witnessed a growth of 36.0 per cent in terms of revenue and 54.7 per cent in terms of results.
“This was aided by demand revival across most end-user segments, higher realisations, product mix enrichment and exports,” said the report.
In terms of the company’s financial performance, overall for FY22, ITC’s gross revenue stands at Rs 59,101 crore (up 22.7 per cent), while EBITDA increased by 22.0 per cent to Rs 18,934 crore. Profit Before Tax at Rs 19,830 crore grew by 15.5 per cent over the previous year and Profit After Tax stood at Rs 15,058 crore against Rs 13,032 crore in the previous year.
ITC’s total comprehensive income for the year stood at Rs 15,632 crore as against Rs13,278 crore in FY21. Earnings per share for the year stood at Rs 12.22 as against the previous year’s Rs 10.59.
Moreover, ITC also managed to sustain its 'AA' rating by MSCI-ESG for the 4th successive year, the highest amongst global tobacco companies, and had been included in the Dow Jones Sustainability Emerging Markets Index.