 "ITC")
Marginally beating Street estimates, Kolkata-based FMCG major ITC posted a rise of 5.7% in its net profit at Rs 2,646.7 crore for the quarter ended December. Its revenue from operations rose 4.5% to Rs 13,470.9 crore.
Its net profit in the year-ago period was Rs 2,503.8 crore while its income from operations stood at Rs 12,887.8 crore.
However, demonetisation seems to have impacted the company’s business. All segments took a hit in their top line, except the hotel business, when compared to the previous quarter of this financial year.
The company said it had to operate in an “extremely challenging” scenario as FMCG sales were adversely impacted because of lower consumer offtake and reduction in trade pipelines, particularly in the immediate aftermath of demonetisation.
Revenue from cigarettes dipped by nearly three% at Rs 8,288 crore, against Rs 8,528.5 crore in the previous quarter.
Gross profit from the cigarette business took a hit on a quarter-on-quarter basis. The profit before tax stood at Rs 3,033.7 crore – a 5.7% dip as compared to a profit of Rs 3,216.88 crore in the previous quarter. However, on a year-on-year (y-o-y) basis, the gross profit from this category rose 1.6%.
According to the firm, performance of the cigarette business was subdued on account of tight liquidity conditions prevailing in the market and continued regulatory and taxation pressures on the legal cigarette industry.
Other FMCG segments dipped by about 4% at Rs 2,569.3 crore, against Rs 2,671.7 crore in the previous quarter. Sales of biscuits, snacks, noodles, personal care products and branded apparel were impacted the most in the initial phase of demonetisation. The loss from the other FMCG businesses was Rs 19.7 crore, against a profit of Rs 18.8 crore in the year-ago period. On a year-on-year basis, the entire FMCG segment, which contributes about 80% to the company’s revenue, posted an increase of 3.4% at Rs 10,857.23 crore.
During this period of currency rationing, which coincided with the third quarter of the International Financial Reporting Standards, the company’s agriculture business fell 11% at Rs 1,671.9 crore, against revenue of Rs 1,880.1 crore in the previous quarter.
Driven by improvement in average room rate and robust growth in the food and beverage revenue, gross profit from ITC’s hotel business fared well. It rose 63% at Rs 42.2 crore from the year-ago period.
ITC combated the low offtake during demonetisation by increasing the service frequency of grocery outlets, enhancing presence in modern trade outlets, increasing direct servicing of select low population group markets and extending temporary credit to select customers. The ITC scrip closed down 2.78%, at Rs 257.50 on the BSE.
Puri to take over as CEO in Feb
ITC has appointed its chief operating officer, Sanjiv Puri, as the new chief executive officer of the company, effective February 5. Puri, who handled about 80 per cent of ITC’s business, will take over from Y C Deveshwar. The succession announcement resulted in splitting up of the positions of CEO and chairman into two different people. So long, Deveshwar, who joined ITC in 1968 was playing the dual role of chairman and CEO of ITC from 1996 till he announced his retirement last year.
Puri to take over as CEO in Feb
ITC has appointed its chief operating officer, Sanjiv Puri, as the new chief executive officer of the company, effective February 5. Puri, who handled about 80 per cent of ITC’s business, will take over from Y C Deveshwar. The succession announcement resulted in splitting up of the positions of CEO and chairman into two different people. So long, Deveshwar, who joined ITC in 1968 was playing the dual role of chairman and CEO of ITC from 1996 till he announced his retirement last year.
