ITC rose 0.36% to Rs 239.60 at 15:09 IST on BSE after net profit rose 10.5% to Rs 2500.03 crore on 8.36% rise in total income to Rs 14091.96 crore in Q2 September 2016 over Q2 September 2015.
The result was announced during market hours today, 26 October 2016.Meanwhile, the S&P BSE Sensex was down 257.28 points or 0.92% at 27,834.14
On BSE, so far 20.91 lakh shares were traded in the counter as against average daily volume of 9.93 lakh shares in the past one quarter. The stock was volatile. The stock hit a high of Rs 242.45 and a low of Rs 233.60 so far during the day. The stock had hit a 52-week high of Rs 266 on 8 September 2016. The stock had hit a 52-week low of Rs 178.67 on 29 February 2016. The stock had underperformed the market over the past 30 days till 25 October 2016, sliding 3.81% compared with 0.72% decline in the Sensex. The scrip also underperformed the market in past one quarter, falling 3.63% as against Sensex's 0.24% rise.
The large-cap company has equity capital of Rs 1211.51 crore. Face value per share is Re 1.
ITC said that the company delivered steady performance in Q2 September 2016 despite a challenging operating environment marked by continuing pressure on legal cigarette industry volumes, increase in input cost and subdued demand conditions prevailing in the FMCG industry. Operating conditions in the hotels and paperboards, paper and packaging segment also remained subdued, ITC said.
The performance of the cigarette business in Q2 September 2016 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. It is pertinent to note that steep increases in excise duty on cigarettes in recent years have resulted in widening the differential in excise duty rates (on a per kg. of tobacco basis) between cigarettes and other tobacco products from 29 times in 2005/06 to over 53 times currently. 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.
The operating environment for the legal cigarette industry in India was rendered even more challenging in the wake of a further increase of 10% in excise duty announced in the Union Budget 2016 and introduction of the new 85% graphic health warnings (GHW) on cigarette packages, ITC said.
The FMCG segment revenue rose 13.3% in Q2 September 2016 over Q2 September 2015 amidst weak demand conditions, with most major categories recording improvement in market standing. The personal care products business continued to focus on product mix enrichment and augmenting its product portfolio.
Segment revenue in hotels business was flattish in Q2 September 2016 over Q2 September 2015 reflecting the subdued operating conditions in the Indian hospitality industry, which continues to be impacted by excessive room inventory in key domestic markets and sluggish macroeconomic environment both in India and major source markets.
The agri business continued to leverage the e-Choupal network to source superior quality wheat at competitive cost and deliver substantial savings to the system through efficient logistics management and other cost-optimisation initiatives. The agri business revenue grew by 2% in Q2 September 2016 over Q2 September 2015 on the back of higher agri-commodity sales in the domestic market offset by lower supplies to the company's FMCG businesses (mainly account timing differences in offtake).
Segment revenue of paperboards, paper & packaging in Q2 September 2016 remained impacted by the subdued demand environment prevailing in the FMCG and legal cigarette industry.
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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