ITC's consolidated net profit jumped 32.4% to Rs 4,076.69 crore on a 5.7% rise in net sales to Rs 13,220.30 crore in Q3 December 2019 over Q3 December 2018.
The company posted a steady performance during the quarter amidst a particularly challenging operating environment as aforestated. Consolidated profit before tax gained 4.6% to Rs 5,049.25 crore in Q3 December 2019 as against Rs 4,828.19 crore in Q3 December 2018. Tax expense, during the quarter, dropped 27% to Rs 1,183.18 crore as compared to Rs 1,620.25 crore in corresponding quarter last year. The Q3 earnings were announced after market hours yesterday, 31 January 2020.
Shares of ITC rose 0.38% to Rs 236.15. It hit an high of Rs 238.15 and a low of Rs 235.80 so far.
In FMCG segment, revenues shot up by 6.1% in Q3 December 2019 over Q3 December 2018, on a comparable basis amidst continued slowdown in the FMCG industry. Segment EBITDA soared 48% to Rs 256 crore, notwithstanding higher marketing investments, gestation and start-up costs of new categories/new facilities.
"The cigarettes business sustained its leadership position in the industry through its unwavering focus on nurturing a portfolio of world-class brands anchored on superior consumer insights, a robust innovation pipeline and superior product development capabilities," ITC said. "Performance during the quarter reflects the persistent weakness in the overall demand environment, especially in rural markets and wholesale channel, tight market liquidity conditions and the increasing salience of illicit trade especially at the premium end. Extremely stringent regulations along with a punitive and discriminatory taxation regime on cigarettes in recent years have had numerous negative, albeit unintended repercussions," it added.
Hotels segment revenue climbed 22.2% and segment EBITDA surged 40.1% in Q3 December 2019 as against Q3 December 2018, registering a strong growth in existing properties and robust performance of new properties drive.
ITC said that the macro-economic environment continues to be adversely impacted as reflected in deceleration in GDP growth, and persistent weakness in consumption demand and investments. Delayed arrival of the kharif crop due to spatial variations in rainfall especially close to the harvest season, commodity price inflation together with disruptions in certain parts of the country exacerbated the already challenging operating environment during the quarter.
Expectations of a good rabi crop and a slew of measures announced by the Indian Government in recent months including reduction in corporate tax rates, initiatives to boost infrastructure and promote exports, augur well for the revival of the economy, ITC added.
Meanwhile, the company's board has appointed Atul Jerath as an additional non-executive director of the company with effect from 31 January 2020 and will continue to hold the office until the conclusion of the next Annual General Meeting (AGM).
ITC is engaged in the marketing of fast moving consumer goods (FMGC). The firm operates through four segments: FMCG; hotels; paperboards, paper and packaging, and agri business.
Powered by Capital Market - Live News
Disclaimer: No Business Standard Journalist was involved in creation of this content
