ITC rose 1.24% to Rs 253.75 at 9:25 IST on BSE after net profit rose 10.09% to Rs 2384.67 crore on 8.61% increase in total income to Rs 13673.58 crore in Q1 June 2016 over Q1 June 2015.
The result was announced after trading hours yesterday, 21 July 2016.Meanwhile, the BSE Sensex was up 36.72 points, or 0.13%, to 27,734.41.
On BSE, so far 1.15 lakh shares were traded in the counter, compared with an average volume of 7.14 lakh shares in the past one quarter. The stock hit a high of Rs 256 and a low of Rs 251.90 so far during the day.
ITC delivered steady performance in Q1 June 2016 despite a challenging operating environment marked by continuing pressure on legal cigarette industry volumes and persistently sluggish demand conditions prevailing in the FMCG industry. Operating conditions in the hotels and paperboards, paper and packaging segment also remained subdued. Revenue from operations rose 8.3% to Rs 13156.68 crore in Q1 June 2016 over Q1 June 2015.
Total Comprehensive Income (TCI) rose 17.6% to Rs 2448.24 crore in Q1 June 2016 over Q1 June 2015. The higher growth in TCI relative to net profit is attributable to a positive swing of Rs 148.34 crore in other comprehensive income primarily on account of favourable movement in fair value of the company's strategic investments in equity.
The performance of the cigarette business during the quarter remained subdued on account of continued pressure on the legal cigarette industry in India. Over the last 4 years, the incidence of excise duty and VAT on cigarettes, at a per unit level, has gone up cumulatively by 118% and 142% respectively thereby exerting severe pressure on legal industry volumes even as illegal trade grows unabated. High incidence of taxation and a discriminatory regulatory regime on cigarettes in India have over the years led to a significant shift in tobacco consumption to lightly taxed or tax-evaded tobacco products like bidi, khaini, chewing tobacco, gutkha and illegal cigarettes which presently constitute over 89% of total tobacco consumption in the country. Besides adversely impacting the performance of the legal cigarette industry, this has led to sub-optimisation of the revenue potential from the tobacco sector.
ITC is a diversified company, with presence in cigarettes, hotels, paperboards & specialty papers, packaging, agri-business, packaged foods & confectionery, information technology, branded apparel, personal care, stationery and other FMCG products. ITC is a market leader in cigarettes.
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