FMCG-to-hospitality major ITC on Friday reported a 9.28 percent growth in its consolidated net profit for the January-March quarter at Rs 3,926.46 crore.
During the same quarter of the previous fiscal, FY 2018-19, the company had reported a net profit of Rs 3,592.80 crore.
For the full fiscal year basis, the company’s profit after tax grew by 21.4 per cent to Rs 15,136.05 crore, aided by reduction in corporate income tax rates during the year.
“Overall for FY2019/20, Gross Revenue at Rs 46323.72 crore increased by 2.4 per cent, while PBT (before exceptional items) at Rs 19298.92 crore grew by 4.6 percent over FY 2018/19,” the company said in a statement.
Besides, free cash flow generation (net of tax and capital expenditure) during the year stood at Rs 11,693 crore, representing a robust growth of 30 percent over the previous year.
Furthermore, it said the macro-economic environment for the year under review was particularly challenging, marked by deceleration in economic activity accentuated by a sharp decline in consumption, especially in rural areas.
Just as the business environment was showing signs of an incipient recovery in the beginning of the fourth quarter, the onset of COVID-19 pandemic changed the situation dramatically, it said.
“In the initial stages, the contagion had a significant impact on the hotels and education and stationery products businesses as it coincided with the peak period and the onset of the school season, respectively,” it said.
The company said: “The cigarettes business consolidated its market standing during the year through continued focus on delivering world-class products along with best-in-class execution.”
However, persistent weakness in the demand environment coupled with growth in illicit cigarette trade weighed on performance. Steep increase in taxes with effect from February 1, 2020 and disruptions in operations in March 2020 exacerbated the situation, it added.
Nevertheless, the company was one of the fastest off the blocks to resume operations after obtaining necessary permissions in the lockdown phase.
“While essential consumer goods have witnessed buoyancy in demand, discretionary categories is likely to recover over time; the company is approaching the future with due caution in light of the heightened uncertainty in the environment,” it said.
Additionally, the company’s directors have recommend an ‘Ordinary Dividend’ of Rs 10.15 per share for the year ended March 31, 2020.
“Total cash outflow in this regard will be Rs 12,476.61 crore,” the statement said.