ITC Ltd net profit up 10.5 per cent in Q2

ITC Ltd net profit up 10.5 per cent in Q2

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Cigarettes-to-hotels-to-FMCG major Ltd on Wednesday reported a 10.5 per cent rise in its stand alone net profit to Rs 2,500.03 crore for the quarter ended September 30, 2016 as compared to Rs 2,262.50 crore for the year-ago period.

ITC Ltd net profit up 10.5 per cent in Q2
Segment revenue grew by 2 per cent over the corresponding period in the previous year on the back of higher agri-commodity sales in the domestic market offset by lower supplies to the company's FMCG businesses

Total income from operations stood at Rs 13,616.61 crore in the quarter under review as compared to Rs 12,611.29 crore in the corresponding period last year.

“In the July-September quarter, revenue from cigarettes was Rs 8,528.47 crore, up 7.09 per cent from Rs 7,963.10 crore in the same quarter last year. The performance of the cigarette business during the quarter remained subdued on account of continued pressure on the legal cigarette industry in India,” a company statement said.

Over the last four years, the incidence of excise duty and VAT on cigarettes, at a per unit level, has gone up cumulatively by 118 per cent and 142 per cent respectively, thereby exerting severe pressure on legal industry volumes even as illegal trade grows unabated, it said.

Total revenue from its hotels, paperboards, paper and packaging and agri business stood at Rs 3,508.81 crore in the second quarter ended in September as compared to Rs 3,464.78 crore last year.

The company said in the hotels business, segment revenue during the quarter was flattish in comparison to the corresponding period in the previous year reflecting the subdued operating conditions in the Indian hospitality industry, which continues to be impacted by excessive room inventory in key domestic markets and sluggish macroeconomic environment both in India and major source markets.

Elaborating on agri business performance, the company said, “Segment revenue grew by 2 per cent over the corresponding period in the previous year on the back of higher agri-commodity sales in the domestic market offset by lower supplies to the company’s FMCG businesses (mainly account timing differences in offtake). Steeper currency depreciation in competing geographies and lower wheat crop output in India constrained growth in exports.”

The FMCG major made “steady progress during the quarter” towards setting up state-of-the-art owned integrated consumer goods manufacturing facilities at Uluberia and Panchla in West Bengal, Kapurthala in Punjab and at Ambarnath in Maharashtra.

“Currently, over 20 projects are underway and in various stages of development — from land acquisition/site development to construction of buildings and other infrastructure,” the statement said.