ITC Q2 net up 4% at Rs 802.7 cr

ITC Ltd today reported a marginal 4 per cent rise in net profit in the second quarter of this fiscal at Rs 802.7 crore on the back of a strong performance in net sales, which rose to Rs 3763 crore or by 15 per cent thanks to enhanced focus on its FMCG businesses which grew by 30 per cent, improved paperboard and packaging revenues and strong performance by its agri business segment.

Company sources said these business groups helped ITC tide over a difficult quarter marked by unprecedented increase in excise duties on non-filter cigarettes in the Union Budget 2008, steep increases in commodity prices and store rentals, the brand building costs of the new Personal Care portfolio and the significant investments in enhancing distribution capability.

ITC warned that the cigarettes business would continue to be under pressure unless some steps were taken though its efforts to create value through international quality products, investments in technology and product design and focused marketing and distribution helped migrate consumers to filter segments.

ITC warned of the threat from non-filter cigarettes,  an estimated trebling of illegal cigarette volumes and the impact of the recent smoking ban in public places which was propelling consumers to non-smoking tobacco consumption.

Thousands of small, marginal tobacco farmers, especially in rain-fed areas where several attempts to grow alternative crops have failed to yield results, faced the greatest threat, it added.