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Backed by all-round growth in sales across various segments, ITC Ltd posted a 22 per cent rise in net profit at Rs 1,701 crore for the quarter ended December 31, 2011, as against the same period last year.
On a sequential basis, net profit rose by 12 per cent from Rs 1,514 crore recorded during the second quarter ended September 30, 2011. Net sales during the quarter ended December grew by 13 per cent to Rs 6,105 crore. The shares of ITC fell by 3.59 per cent to close at Rs 201.35 on the BSE on Friday.
Though revenues from the agri business and paperboards segments grew on a year-on-year basis, on a sequential basis, growth was muted. While revenues from agri business were down 21 per cent from the Rs 1,435 crore recorded in the second quarter ended September 30, 2011, that from the paperboards division dipped by about three per cent from Rs 1,005 crore during the same period.
“ITC's gross margins have expanded by 205 basis points and net margins by 128 basis points during the quarter, backed by margin expansions in the cigarette, paperboards and hotels division,” said Mr Sreekanth, research analyst, media and FMCG, Angel Broking.
Cigarettes Division
ITC's initiatives in terms of pack modernisation, improvement in smoke profile and introduction of new brands and variants such as Player's, Classic Citric Twist and Hero during the quarter have bolstered the company's market standing in the premium category and improved overall market share, said a press statement issued by ITC.
FMCG Business
The losses in the non-cigarette FMCG business have come down to Rs 47 crore (Rs 74 crore). The branded packaged foods business grew, driven by higher volumes and improved profitability. “The business achieved a growth in revenues, aided by new launches and the introduction of product variants and extensions in the target markets. Improvement in profitability was further aided by improvements in the product, process efficiencies and smart sourcing,” the release said.
The hospitality industry was impacted by the weak macroeconomic environment in the US and Europe — the two key source markets — and a slowdown in the Indian economy. “With lower demand on the one hand, and significant additions to supply in key markets on the other, the hospitality industry is witnessing challenging times,” the release said.
Paperboards
The business witnessed growth despite the challenges of high fuel and fibre costs, which were offset by a combination of product mix enrichment and enhanced value capture through fully integrated operations.
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