Diversified business conglomerate ITC on Thursday posted an 18% increase in its net profit at R1,891.33 crore during the April-June quarter, largely in line with analysts? expectations. The company had reported a net profit of R1,602.14 crore in the corresponding quarter a year ago. Net sales during the period increased 10.31% to R7,338.52 crore against R6,652.21 crore in the corresponding period last year.
Gross revenue during the quarter grew 13.4% to R10,726.84 crore, driven by agri and the FMCG businesses. The company said wheat and leaf tobacco were instrumental in robust performance of agri business but a weak macro-economic scenario in major source markets and in India, coupled with high room inventory levels in key domestic cities, resulted in a relatively weak pricing scenario in the hotel segment. This lead to a muted growth in the segment?s revenues during the quarter.
Revenue from FMCG business increased by 10.56% to R5,282.05 crore in the quarter against R4,777.29 crore in the corresponding quarter last year. ITC?s business is divided into two categories cigarettes and others. Revenue from cigarettes increased by 7.05% to R3,537.39 crore while others increased by 18.43% to R1,744.66 crore.
?The cigarette industry in India continues to be impacted by a discriminatory taxation. Steep increases in excise duty on cigarettes for the second year in succession and the arbitrary increases in value added tax (VAT) on cigarettes by some states during the quarter have exacerbated the situation,? the company said.
However, the company?s non-cigarette FMCG segment improved profitability amid a slowdown in private consumption expenditure, ITC said.
?The company?s branded packaged foods businesses posted robust growth in revenues and enhanced market standing across categories during the quarter,? it added.
Revenue from non-FMCG business, which includes hotels, agri business and paperboard, paper and packaging were at R3,601.98 crore, an increase of 20.77%.
ITC, which reported 7.53% growth in revenue from hotel segment at R249.86 crore, attributed weak global macroeconomic environment and high levels of room inventory in key domestic markets as a reason that impacted the performance in the segment.
