ITC Ltd posted net profits of Rs 300.67 crore for the first quarter of the financial year ended June 30, up 21 per cent from Rs 248.97 crore for the same period last financial year.
Net sales for the quarter was at Rs 1047.89 crore, against Rs 1005.99 crore in Q1 of 2000. Other income was at Rs 26.42 crore as compared to Rs 17.73 crore in the quarter ended June 30, 2000. Pre-tax profits grew 18 per cent to Rs 466 crore, with earnings per share at Rs 12.25 in the first quarter.
Company sources said the rise in profits was on account of cost savings, particularly interest cost savings, along with the better performance of the brands. However, the company cautioned that increase in excise duties in the budget has led to a fall in cigarette sales in the quarter.
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The ITC stock closed at Rs 791.05, higher by Rs 4.20 (0.53 per cent) over its close on Thursday, with traded volumes of 2.10 lakh shares on the BSE and 2.86 lakh shares on the NSE.
With excise rates yet to be harmonised in the south Asia region, the lower customs and excise duty in Nepal and Bangladesh coupled with open borders with these countries continued to be a problem. Company sources said another cause of worry was the abnormally high level of cigarette sales from the duty free shops at airports, where 8.2 million sticks were being sold monthly, according to figures recently released. This would cut into the share of Indian made cigarettes in the market, they said.
Among its core activities, the two-month strike at the Tiruvottiyur packaging and printing plant had been called off in mid-May and production has recommenced. On the raw material front, the company has enough stocks of flue cured Virginia (FCV) tobacco for the current year as it had purchased tobacco well in excess of its requirements last year. The Tobacco Board has declared a crop holiday in Andhra Pradesh and cancelled auctions in the current season.
The e-commerce initiative of the company through e-choupal expanded operations in Madhya Pradesh, Karnataka and Andhra Pradesh to soya, coffee and aqua products.
In the hotels division, construction of ITC Sonar Bangla at Kolkata and ITC Grand Towers at Mumbai were progressing on schedule. The greetings cards business extended reach to 368 locations and 9,500 outlets while the lifestyle retailing business under the Wills Sport brand has spread out to 12 stores in 10 cities.