Diversified conglomerate, ITC Ltd reported a marginal, 0.70 per cent increase in net profit to Rs 2,653 crore for the third quarter ending December 31, 2015. Profits in the corresponding quarter last fiscal stood at Rs 2,635 crore.
For the period, the company saw increased tax expenses – or a 16 per cent rise to Rs 1,352 crore, as against Rs 1,165 crore in Q3 of FY-15.
Net sales during the period jumped by 3.4 per cent to Rs 9,103 crore (apprx); as against the Rs 8,800 crore in the year-ago-period. Other income too increased by over 16 per cent to Rs 678 crore (Rs 582 crore).
According to a statement by the company, the performance during the quarter remained subdued reflecting severe pressure on legal cigarette industry volumes, lack of trading opportunities in agri-commodities and sluggish demand environment prevailing in the FMCG industry.
Cigarettes continued to be the prime driver in terms of contribution towards both revenues and profits.
FMCG Revenues
In the third quarter, cigarette revenues increased by nearly 6 per cent to Rs 4,380 crore (against Rs 4142 crore); with profit before tax (PBT) rising by over three per cent to Rs 2,984 crore.
The FMCG others (excluding cigarette) business grew by 7 per cent to Rs 2,478 crore with PBT up 65 per cent to Rs 19 crore.
Supply chain disruption caused by heavy rainfall and floods in Chennai were cited as a hindrance. “Additionally, synchronisation of trade pipeline ahead of the ensuing season by the education and stationery products business impacted revenues,” ITC said.
Apart from gestation costs of new categories; expenditure incurred in communicating the “superior value proposition” of its instant noodles too impacted segment results, the company maintained in a media release.
Hotels, Agri, Paperboards
Revenues in the hotel segment registered a 4.5 per cent growth at Rs 345 crore (Rs 330 crore); but, PBT came down by over 10 per cent to Rs 26 crore (Rs 29 crore).
In a year-on-year comparison, revenue from paperboards, paper & packaging segment increased 5 per cent to Rs 1,260 crore (Rs 1,199 crore); while the PBT went up by nearly 13 per cent to Rs 241 crore (Rs 214 crore).
For the October-December quarter, however, agri-business revenue fell by over 7 per cent to Rs 1,481 crore (Rs 1,598 crore). The PBT too came down by 3 per cent to Rs 231 crore; compared to the Rs 238 crore it reported in the year-ago-period.
ITC stock closed at Rs 308.65 (0.69 per cent up) at the BSE on Friday.