Companies

ITC net up 4% on sluggish agri-biz

Abhishek Law Kolkata | Updated on January 24, 2018 Published on July 30, 2015

itc

Over 7% slump in total income on dip in agri-biz revenue

Diversified conglomerate ITC Ltd has reported a near four per cent jump in net profit to ₹2,265 crore for the quarter ended June 30, 2015, against the ₹2,186 crore it reported in the year-ago period.

However, a dip in agri-business revenues, pressure on the cigarette industry and sluggish demand in FMCG led to an over seven per cent slump in total income (during the period) to ₹8,588 crore. Total income in the corresponding period last fiscal stood at ₹9,248 crore.

The bottom-line growth was supported by increased “other income” (a 34 per cent increase to ₹315 crore during the April to June period over the same period last year), but the revenue was impacted by cigarette and agri businesses.

Cigarette revenues – that accounts for 48 per cent of the net sales – dipped by 1.2 per cent to ₹4,150 crore for the first quarter of FY-16. It stood at ₹4,201 crore in the corresponding period last year.

However, earnings before finance costs and tax from the segment improved by 2.2 per cent to ₹2,781 crore (against ₹2,721 crore) during the period.

According to a statement by ITC, the price differential between legal and illegal cigarettes has widened thereby making it “extremely difficult” to counter unabated growth of illegal cigarettes.

Other FMCG business

On the back of increased revenues, the “FMCG Others” category (including branded packaged foods business, apparel, education and stationery products, personal care and safety matches and agarbattis) was able to reduce losses.

It reported an over 12 per cent growth in revenues to ₹2,171 crore (₹1,935 crore). The hotels business, driven by a strong growth in room occupancies and food and beverage earnings, saw a near 16 per cent jump in revenues to the tune of ₹288 crore (₹249 crore) for the period under review.

However, profits eluded the segment. And it reported a loss (before interest and tax) of ₹7.25 crore (₹12 crore).

Agri-business

A reduction in sales from agri-business following lack of export opportunities in wheat and soya, saw a dip in revenues by 29.5 per cent to ₹2,325 crore in the April to June period against ₹3,296 crore in the year-ago-period.

Earnings before finance costs and tax (in agri) increased by nearly 16 per cent to ₹234 crore (₹202 crore).

Shares of ITC closed at ₹315.80 up by 3.90 per cent on the BSE on Thursday.

Share of ITC were trading at Rs 311, up by 2.32 per cent on the BSE on Thursday around 1.20 pm.

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Published on July 30, 2015
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