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Table of Contents
Overview of ITC’s Performance
ITC Q4FY25 and FY25 results were announced on May 22, 2025, showcasing strong revenue growth, albeit with pressure on margins. Additionally, the company demerged its hotel business, retaining a 39.88% stake in ITC Hotels. This article provides a detailed analysis of ITC’s performance across key business segments and what lies ahead. We shall analyze ITC Q4FY25 and FY25 results in detail once the annual report for FY2024-25 is released.
Cigarettes: ITC’s Core Business
Once primarily a cigarette company, ITC has diversified into FMCG products like food and personal care. The cigarette segment’s contribution to total revenue has declined from 60.4% in FY15 to 39.5% in FY25, though it remained 42.4% in Q4FY25.
Despite challenges such as rising tobacco leaf costs, the segment continues to be highly profitable due to its inelastic demand—even price hikes do not significantly reduce consumption. Arbitrary taxation policies force cost adjustments, which are passed onto customers.
Key Developments in the Cigarette Segment
- Revenue Growth: Q4FY25 revenue up 6.2%, EBIT up 4.8% YoY.
- New Product Launches Targeting Gen Z:
- Classic Clove
- Flake Insta Fresh
- Gold Flake Social 2-Pod
- Gold Flake Indie Clove
Agri-Business Growth & Expansion
ITC’s agri-business saw robust revenue expansion, driven by strong exports:
- Revenue Growth: Q4FY25 revenue up 17.8% YoY, 1.9% QoQ.
- EBIT Growth: 35.5% YoY, but down 49.1% QoQ due to seasonal fluctuations.
- Key Export Categories: Coffee, Spices, Tobacco Leaf, Rice.
Nicotine Project: Shipment operations began in Q4FY25, with plans to scale exports gradually.
Paperboards, Paper & Packaging Business
Revenue in the segment grew moderately, but profitability declined due to multiple external pressures:
- Revenue Growth: 5.6% YoY in Q4FY25.
- EBIT Decline: Down 33% YoY due to:
- Dumping by China & Indonesia
- Rising wood prices impacting cost structure
ITC has accelerated plantation initiatives to stabilize wood supply and mitigate pricing volatility.
FMCG (Non-Cigarette) Segment: Margin Pressure Continues
Margins in ITC’s FMCG (non-cigarette) segment remain under stress:
- EBIT Margin in Q4FY25: 6.3% (up from 5.91% in Q3FY25, down from 9.04% YoY).
- Revenue: ₹5,503 crore in Q4FY25 (+3.7% YoY).
- EBIT Decline: Down 27.9% YoY.
- EBITDA (FY25): ₹2,164 crore (vs. ₹2,339 crore in FY24).
- EBITDA Margin (FY25): 9.8% (vs. 11.2% in FY24), Q4FY25 EBITDA at 8.9%.
- Raw Material Cost Surge: Edible oil, wheat, maida, potato, cocoa.
ITC’s Expanding FMCG Portfolio & Acquisitions
To strengthen its non-cigarette business, ITC made three strategic acquisitions in FY25:
- Sresta Natural Bioproducts (24 Mantra Organic Foods) – Acquired for ₹473 crore, specializing in organic spices, pulses, honey, jaggery, cereals.
- Mother Sparsh Baby Care – ITC now holds 39.47% stake, entering the baby care segment.
- Ample Foods (Prasuma & Meatigo) – Gradual acquisition over three years, focusing on frozen foods (momos, baos, Korean fried chicken, raw meat).
ITC Infotech: Steady Growth & Strategic Acquisition
ITC Infotech reported mixed results, with revenue growing 14% YoY and adjusted EBITDA up 13%.
Strategic Expansion:
- Acquired Blazeclan Technologies for ₹485 crore, expanding into cloud & IT solutions.
- Healthy growth in TCV (Total Contract Value) bookings.
Conclusion: ITC’s Outlook & Strategic Positioning
Despite margin pressures, ITC’s Q4FY25 and FY25 results highlight strong revenue growth across key segments. The company’s diversification strategy—particularly in agri-business and ITC Infotech—has supported expansion.
However, profitability challenges in FMCG and external pressures on the paper & packaging business remain concerns. ITC’s focus on acquisitions, new product launches, and strengthening supply chains positions it well for future growth in an evolving market landscape.
Also Read: Analysis of ITC in FY24 – Key Highlights
References
- Investor presentation of ITC Q4FY25 and FY25 Results
- ITC to expand presence in frozen foods with Prasuma and Meatigo acquisitions, Your Story
- ITC Raises Stake In Mother Sparsh To 39.47%, Business World
- ITC announces acquisition of 24 Mantra Organic brand, Mint
