ITC Q1 net up 18% to Rs 1,891.33 crore on good show across biz
New Delhi: Pressure on its cigarettes segment notwithstanding, diversified business conglomerate ITC Ltd on Thursday reported 18.05 percent increase in net profit at Rs 1,891.33 crore in the quarter ended June 30, 2013 driven by good performance across business verticals.
The company had reported net profit of Rs 1,602.14 crore in the corresponding quarter a year ago.
ITC's net sales during the period under review increased by 10.31 percent to Rs 7,338.52 crore as against Rs 6,652.21 crore in the corresponding period last year, the company said in a statement.
The performance has been delivered against a backdrop of a challenging business environment, not least the slowdown in private consumption expenditure and the steep hike in excise duty on cigarettes announced in the Union Budget 2013, it added.
The company's revenue from FMCG business increased by 10.56 percent to Rs 5,282.05 crore in the quarter as against Rs 4,777.29 crore in the corresponding quarter last year.
Its business is divided into two categories cigarettes and others. Revenue from cigarettes increased by 7.05 percent to Rs 3,537.39 crore while others increased by 18.43 percent to Rs 1,744.66 crore.
"The cigarette industry in India continues to be impacted by a discriminatory taxation. Steep increases in excise duty on cigarettes for the second year in succession and the arbitrary increases in Value Added Tax (VAT) on cigarettes by some states during the quarter have exacerbated the situation," ITC said.
However, the company's non-cigarette FMCG segment improved profitability amid a slowdown in private consumption expenditure, ITC said.
"The company's branded packaged foods businesses posted robust growth in revenues and enhanced market standing across categories during the quarter," it added.
Others in FMCG business include packaged foods (bakery and confectionery foods, snack foods, staples, spices and ready to eat foods), apparel, education and stationery products, personal care products, safety matches and incense sticks.
Revenue from non-FMCG business, which includes hotels, agri business and paperboard, paper and packaging were at Rs 3,601.98 crore, increase of 20.77 percent.
ITC, which reported 7.53 percent growth in revenue from hotel segment at Rs 249.86 crore, attributed weak global macroeconomic environment and high levels of room inventory in key domestic markets as a reason that impacted the performance in the segment.
"A weak macroeconomic scenario in major source markets and in India, coupled with high room inventory levels in key domestic cities resulted in a relatively weak pricing scenario leading to a muted growth in segment revenues during the quarter," the company added.
Total expenses were at Rs 4,834.69 crore, an increase of 6.81 percent compared with Rs 4,526.12 crore last year.
Shares of ITC Ltd were trading at Rs 359.85 apiece in the afternoon trade, down 4.30 percent from their previous close on BSE.