Cigarettes-to-hotel group ITC Ltd has reported a 16.25 per cent rise in net profit at Rs 2,385 crore for the quarter ended December 31 against Rs 2,052 crore reported in the year-ago period.
Higher profit came on the back of a 13 per cent growth in net sales. While cigarettes continue to be the mainstay, the Kolkata-based company witnessed substantial growth in other businesses, including hotels, agri-business, food, personal care, education and stationery, lifestyle apparels, agarbattis and matches.
During the third quarter, the hotels business reported a near 11 per cent growth in profit at Rs 62 crore. The growth was largely attributed to “superior performance by ITC Grand Chola” in Chennai The FMCG business (other than cigarettes) reported a profit of over Rs 10 crore against a loss of around Rs 24 crore in the corresponding quarter last fiscal.
“Segment profits … were driven by enhanced scale and improvement in operating leverage,” a company release said. Driven by higher realisation, the agri-business reported 19 per cent growth in profit at Rs 205 crore. Paperboards, paper and packaging division recorded a marginal one per cent rise in profit at Rs 232 crore.
Cigarettes Cigarettes contributed 48 per cent (or Rs 4,116 crore) to the net sales and 84 per cent (nearly Rs 2,653 crore) to profit (Rs 3,162 crore) before finance cost and tax.
Contribution of cigarettes to net revenue and profit remained more or less unchanged across the comparable quarter last fiscal.
According to Rikesh Parikh, Vice-President Institution Corporate Broking, Motilal Oswal Securities Ltd, ITC’s cigarette business volumes saw a decline of 2 per cent during the third quarter. “We expect the cigarette volume decline to arrest towards the fourth quarter of FY14 and recover in FY15, while the non-cigarette business to report EBIT break-even in FY14.”