Comments
Diversified conglomerate ITC Ltd disappointed markets with net profit during July to September period rising by a mere 0.25 per cent at ₹2,431 crore against ₹2,425 crore in the corresponding period last fiscal.
Profit remained flat mainly on account of an over one per cent drop in net sales to about ₹8,805 crore during Q2. Sales in the corresponding quarter last year stood at ₹8,930 crore.
Weak revenue growth in agri and paper business impacted top-line. Margin expansion (net profit margins rose to 27.30 from 26.88, Y-o-Y) and rise in other income (by 12 per cent to ₹399 crore Y-o-Y) boosted profits.
“Performance during the quarter remained subdued reflecting unprecedented pressure on legal cigarette industry volumes, lack of trading opportunities in agri-commodities and sluggish demand in the FMCG industry coupled with prolonged disruption in the instant noodles category due to the regulatory challenges,” ITC said in a statement.
Agri-business revenue for the quarter under review dipped by 10.5 per cent to ₹1,874 crore (₹2,059 crore), while paperboards, paper and packaging segments saw a little over two per cent dip to ₹1,254 core (₹1,284 crore).
Accordingly, profit (before tax) for these two segments also saw a drop by over one per cent to ₹294 crore (agri-business) and by 14 per cent to ₹209 crore.
FMCG & other verticals Cigarettes, which account for nearly 49 per cent of its net sales, saw a near two per cent jump in revenues to ₹4,317 crore (against ₹4,251 crore in Q2 of FY-15). The profit before tax rose by three per cent to ₹2,969 crore.
FMCG others business (packaged foods, dairy products, apparel, stationery etc) reported a 7 per cent growth during the quarter at ₹2,352 crore against ₹2,196 crore in the corresponding period last year.
The losses in the segment widened to ₹11.10 crore (against a loss of ₹10.31 crore).
Revenue from its hotels business grew by nearly 11 per cent to ₹290 crore, with losses (before tax) declining to ₹5.5 crore (in Q2 of this fiscal) from ₹9.6 crore a year-ago.
ITC shares closed at ₹334.70, down by 4.30 per cent, on the BSE on Friday.
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.