On the back of higher profitability in the agri business and foods division, ITC Ltd posted a rise of 17.37 per cent in its consolidated profit after tax (PAT) for the quarter ended June 30 to Rs 878.70 crore, up from Rs 748.67 crore in the corresponding quarter of last financial year.
The total income of the company — which is a diversified business conglomerate with interests in cigarettes, foods, hotels, speciality papers and packaging — stood at Rs 4,132.92 crore during the period, up 5.06 per cent from Rs 3,934 crore earlier.
The company’s losses from its ‘FMCG-Others’ segment — comprising branded packaged foods, lifestyle retail and personal care products — was down to Rs 99.77 crore from Rs 122.61 crore in the corresponding quarter last year. Sales from FMCG-Others grew 9.49 per cent to touch Rs 759.39 crore during the quarter under review from Rs 693.57 crore in the corresponding previous.
“As a result of the restructured product portfolio, profitability of the agri-business continued to be robust, despite lower revenues. While margins improved, investments in brand building in the personal care and branded foods business continued to impact the segment results of ‘FMCG-Others,” the company said in a statement.
The company’s profits from its total FMCG business grew 22 per cent during the quarter to touch Rs 1,025.62 crore, up from Rs 838.80 crore in the corresponding quarter previous year, led by its cigarettes business which grew 17.06 per cent during the quarter to touch Rs 1,125.39 crore.
Overall turnover growth for the quarter under review was muted at 4.7 per cent due to the declining growth of its hotels and agri-businesses. For hotels, the squeeze on corporate travel along with the steep reduction in international travel as a fallout of the global financial crisis triggered a significant slide in occupancies and average room rates at ITC hotels.
Lack of market opportunities also resulted in lower throughput of soya and wheat volumes, which impacted ITC’s agri product revenues during the period.
Although ITC believes its innovation in the cigarettes business and packaging styles would enable the business to deliver superior value, the company said the severe taxation and regulatory milieu for cigarettes in India remains a cause for concern.
Close on the heels of the smoking ban in public places, the cigarette industry was subjected to imposition of pictorial graphic warnings during the quarter. ITC warned that these regulations would impact cigarettes more than other forms of tobacco consumption.
