ITC misses street expectations; reports net profit growth of 3.6%

Missing street estimates, cigarettes-to-hotel major ITC reported a net profit growth of 3.6% at Rs 2,361.18 crore in the March quarter, an as compared to Rs 2,278.01 crore last year during the same period.

Net sales for the quarter stood at Rs 9188.25 crore up by 0.4% than Rs 9145.14 crore during the corresponding quarter last fiscal.

Revenue in ITC’s cigarette segment stood at Rs 4210.70 crore, an growth of 3.2% than Rs 4078.78 crore in the corresponding period. This was on account of a steep price increase even though cigarette volumes continued to show decline. Cigarettes account for more than 80% of ITC's pre-tax profit.

In March, ITC had effected a price increase to the tune of 21%, the sharpest hike at one go. “Excise duty on sub-65mm was increased by 25% for mm and by 15% for cigarettes of other lengths. Cigarettes account for more than 80% of ITC's pre-tax profits.

The non-cigarette consumer goods business, comprising packaged foods, clothes, education, stationery and personal-care products, reported a profit of Rs 83.17 crore on revenue of Rs 2565.51 crore.

Foods account for 70% of ITC’s FMCG business and of late that category has seen volume growth better than of rivals. The company has also emerged the second largest player in the deodorant market within a year of launch.

Among the other segments, hotels continued to remain in red reporting a loss of Rs 17.81 crore.

The paper and agriculture business division reported a profit of 2.15 crore and Rs 18.95 crore respectively.

ITC Limited