The Hindu Business Line : ITC's non-cigarette business drives Q3 profits

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Kolkata Jan. 31 ITC has recorded a 23.2 per cent growth in post-tax profit during the quarter ended December 31, 2006. The company's post-tax profit during the third quarter of 2006-07 was Rs 717.4 crore. Its net turnover during the third quarter of the current fiscal stood at Rs 3,166 crore, an increase of 24 per cent compared with the corresponding period last fiscal.

The improvement in the company's financial performance has been attributed to, among other things, a 31 per cent growth in the non-cigarette business, which currently accounts for 52 per cent of the company's net turnover.

Growth curves

According to a company press release issued here, ITC's branded packaged food business continued to grow with sales for the quarter under review growing by 65 per cent compared with last year. The Lifestyle retailing business grew by 38 per cent during the quarter even as the greetings, gifts and stationery business grew by 27 per cent.

In the safety matches business, the company's brands, including Aim — the highest-selling safety matches brand in the country — continued to enjoy customer preference.

The company's hotels business recorded segment revenue growth of 28 per cent to touch Rs 282 crore on the back of a 37 per cent growth in overall revenue per room. Sales of value-added paperboards also grew during the quarter even as the company's agri-business recorded a growth of 20 per cent, driven primarily by exports of leaf tobacco and increased levels of trade in soya, non-basmati rice, channa and coffee.

The release states that the cigarette industry "continued to operate in a climate of rapidly escalating restrictions on consumer/marketing freedoms".

It adds that "while the company welcomes free and pragmatic laws on tobacco control and ensures compliance with these in letter and spirit, it is engaged in drawing the attention of policy makers and legislators to the inequitable situation arising out of tobacco control legislation being enforced, in effect, only on the cigarette industry".