ITC March quarter net profit up 9.86% to ₹2,932.71 crore
KOLKATA: Cigarette and consumer goods maker ITC Ltd Wednesday said its net profit in the March quarter rose 9.86% from a year ago to ₹2,932.71 crore as margins expanded. Gross revenue from sales rose only 3.56% to ₹17,933.48 crore, which the company attributed to subdued demand and disruptions in supply chain.
The company on Wednesday re-designated its CEO and wholetime director Sanjiv Puri as managing director.
The cigarette segment contributed ₹3,505.76 crore of pretax profit compared with ₹3,258.76 crore, up 7.57% yearon-year (y-o-y). Pre-tax profit from other consumer goods jumped to ₹91.21 crore from ₹55.56 crore in the same period a year ago. The results were in line with the expectations of its analysts, Edelweiss Capital Ltd said in a report.
For the full year, ITC’S net profit is up 10% over the previous year to ₹11,223.25 crore, or ₹9.16 per share, compared with ₹8.38 in fiscal 2017. The company will be paying a dividend of ₹5.15 per share of ₹1 each for the year till March 31. Net profit for the year, however, includes an exceptional item—a writeback of provision of ₹270 crore.
ITC’S shares closed at ₹285.95 each on the Bombay Stock Exchange on Wednesday, up 1.47% in a weak market.
According to Edelweiss, cigarette sales by volume were down 1-2% y-o-y in the March quarter. In the December quarter too, cigarette sales by volume had contracted by an estimated 5%, Edelweiss said. The perform- ance reflects “severe pressure” on tax-compliant cigarette manufacturers in the wake of “steep escalation” in tax rates, ITC said in a statement.
ITC has hiked prices of cigarettes by 10-11% to offset the hike in taxes, according to Edelweiss, and that, in turn, may have impacted sales by volume.
Revenue from the hotel business in the March quarter rose 5.5% y-o-y to ₹408 crore, but pretax profit jumped to ₹75.47 crore from ₹66.93 crore in the same period a year ago, a growth of 12.75% thanks to an improvement in room rates. The performance of the segment was impacted by huge room inventory, ITC said in its statement.
The company’s farm commodities trading business was weak in the March quarter and turned in pre-tax profit of ₹123.97 crore compared with ₹134.92 crore in the same period a year ago as the shortage of leaf tobacco due to a drought in Andhra Pradesh weighed heavily on performance, the company said. Pre-tax profit from the paper and paperboards business was flat at ₹242.42 crore.