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Diversified conglomerate ITC Ltd disappointed markets with net profit during July to September period rising by a mere 0.25 per cent at ₹2,431 crore against ₹2,425 crore in the corresponding period last fiscal.
Profit remained flat mainly on account of an over one per cent drop in net sales to about ₹8,805 crore during Q2. Sales in the corresponding quarter last year stood at ₹8,930 crore.
Weak revenue growth in agri and paper business impacted top-line. Margin expansion (net profit margins rose to 27.30 from 26.88, Y-o-Y) and rise in other income (by 12 per cent to ₹399 crore Y-o-Y) boosted profits.
“Performance during the quarter remained subdued reflecting unprecedented pressure on legal cigarette industry volumes, lack of trading opportunities in agri-commodities and sluggish demand in the FMCG industry coupled with prolonged disruption in the instant noodles category due to the regulatory challenges,” ITC said in a statement.
Agri-business revenue for the quarter under review dipped by 10.5 per cent to ₹1,874 crore (₹2,059 crore), while paperboards, paper and packaging segments saw a little over two per cent dip to ₹1,254 core (₹1,284 crore).
Accordingly, profit (before tax) for these two segments also saw a drop by over one per cent to ₹294 crore (agri-business) and by 14 per cent to ₹209 crore.
FMCG & other verticals Cigarettes, which account for nearly 49 per cent of its net sales, saw a near two per cent jump in revenues to ₹4,317 crore (against ₹4,251 crore in Q2 of FY-15). The profit before tax rose by three per cent to ₹2,969 crore.
FMCG others business (packaged foods, dairy products, apparel, stationery etc) reported a 7 per cent growth during the quarter at ₹2,352 crore against ₹2,196 crore in the corresponding period last year.
The losses in the segment widened to ₹11.10 crore (against a loss of ₹10.31 crore).
Revenue from its hotels business grew by nearly 11 per cent to ₹290 crore, with losses (before tax) declining to ₹5.5 crore (in Q2 of this fiscal) from ₹9.6 crore a year-ago.
ITC shares closed at ₹334.70, down by 4.30 per cent, on the BSE on Friday.
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