In a significant financial development, ITC Limited reported a consolidated net profit of Rs 19,727 crore for the January-March quarter of FY25, marking a 300% year-on-year increase. This substantial rise is primarily attributed to a one-time exceptional gain of Rs 15,145 crore resulting from the demerger of its hotel business.
Financial Performance Overview
Excluding the exceptional gain, ITC's net profit stood at Rs 5,155 crore, reflecting a modest 3% increase compared to the same quarter in the previous year. The company's revenue from operations rose by 10% year-on-year to Rs 20,376 crore, up from Rs 18,562 crore in the corresponding period last year.
The FMCG–Cigarettes segment, a significant contributor to ITC's revenue, reported a revenue of Rs 9,228.66 crore in Q4 FY25, compared to Rs 8,688.92 crore in Q4 FY24. Segment profit also grew to Rs 5,402.57 crore, up from Rs 5,157.57 crore in the same quarter last year.
Dividend Announcement
ITC's Board of Directors has declared a final dividend of Rs 7.85 per share for FY25. The record date for determining the entitlement of members for the final dividend is set for May 28, 2025. This final dividend, combined with the interim dividend of Rs 6.50 per share declared earlier, brings the total dividend for FY25 to Rs 14.35 per share.
Impact of Hotel Business Demerger
The exceptional gain of Rs 15,145 crore in Q4 FY25 is attributed to the demerger of ITC's hotel business. This strategic move allowed ITC to unlock value from its hotel division, contributing significantly to the company's bottom line for the quarter.
Market Reaction
Following the announcement of the Q4 results, ITC's share price experienced fluctuations as investors assessed the impact of the one-time gain and the company's core business performance. The market's response underscores the importance of sustainable growth in ITC's primary business segments beyond exceptional items.
Conclusion
ITC's Q4 FY25 results highlight the significant impact of strategic corporate actions, such as the demerger of its hotel business, on its financial performance. While the exceptional gain has boosted the quarterly profit figures, the modest growth in core operations indicates the need for continued focus on strengthening the company's primary business areas. The declared dividend reflects ITC's commitment to delivering shareholder value amidst its ongoing business transformations.
Written by Indira Securities SEBI Registered with 30 plus years of experience in Stock Market!!!