ITC net profit up 12.6% at Rs 3,174 crore in June quarter

Largely in line with market expectations, ITC on Friday reported a handsome 12.6% year-on-year increase in its standalone net profit to Rs 3,173.94 crore for the first quarter ended June 30, with its gross revenue soaring 6% y-o-y during the period. The diversified conglomerate had posted a net profit of Rs 2,818.68 crore in the corresponding quarter a year ago.

The cigarette-to-FMCG-to-hotel major’s gross revenue from sale of products and services stood at Rs 11,361.35 crore for the June quarter this fiscal compared with Rs 10,722.22 crore for the corresponding period last fiscal, according to a stock exchange filing. On a sequential basis, however, both net profit and gross revenue in the April-June period saw 8.84% and 5.82% quarter-to-quarter (q-o-q) decline from Rs 3,481.90 crore and Rs 12,064.15 crore, respectively, in the January-March period.

The company said that it posted a steady performance during the June quarter amidst sluggish demand conditions.

On Friday, ITC’s scrip fell 1.12% to end the day at Rs 264.60 on the BSE, while the benchmark BSE Sensex closed higher by 0.27%. The company declared the June quarter results after normal trading hours.

During the first quarter this fiscal, revenue from the company’s cigarette business grew 6% y-o-y to Rs 5,433.40 crore, while operating profit from the segment increased by an over 8% y-o-y to Rs 3,849.13 crore during the period. The country’s largest cigarette maker said performance during the quarter was impacted by weakness in the overall demand environment, while a “punitive and discriminatory taxation and regulatory regime”, together with sharp increase in illegal trade in recent years, continued to pose significant operating challenges to the legal cigarette industry in India.

During the quarter under review, non-cigarette FMCG business registered a 6.62% y-o-y growth in its revenue to Rs 3,060.05 crore, while the segment posted a whopping 55.66% y-o-y growth in operating profit at Rs 78.02 crore during this period. For ITC, the non-cigarette FMCG business comprises branded packaged foods, lifestyle retailing, education & stationery products, personal care products and safety matches, among others. In the non-cigarette FMCG segment, earnings before interest, taxes, depreciation and amortisation (Ebitda) for the first quarter was Rs 180.69 crore, against 127.76 crore a year ago.

“The FMCG-Others (non-cigarette) segment delivered a resilient performance during the quarter amidst a marked slowdown in the FMCG industry across urban and rural markets,” the company statement said, adding branded packaged foods businesses delivered a steady performance during the quarter. In the personal care products business, liquids (handwash and bodywash) and the ‘Nimyle’ range of herbal floor cleaners performed well and were extended to new markets, it added.

ITC’s hotel segment revenue during the quarter was up 15% y-o-y at Rs 392.59 crore with its operating profit de-growing 21.4% y-o-y at Rs 10.39 crore. The company said while the segment Ebitda posted a strong growth of 18%, additional depreciation charge pertaining to the new properties weighed on segment results.