FMCG major ITC Ltd reported a near 10 per cent jump in net profit to ₹2,819 crore for the quarter ended June 30, 2018. The net profit in the corresponding period in the last fiscal stood at ₹2,561 crore.
The profit was driven by improved performances across all its segments that include cigarettes, FMCG and hotels, and a reduced incidence of excise duties.
The gross revenue from sales for Q1 (April-June) FY19 stood at ₹10,722 crore. ITC in a statement to the bourses said revenues were not comparable considering the roll-out of GST which led to change in accounting procedures.
On a comparative basis, the gross sales (net of rebates and discounts) saw a 13.5 per cent jump year-on-year.
Major revenue earner
Cigarettes continued to be the major driver in revenues and profit before tax (PBT). It accounted for nearly 48 per cent of the company’s gross revenues at ₹5,128 crore from sale of products and 83 per cent of its PBT at ₹3,558 crore in Q1 FY19.
The company said “punitive and discriminatory taxation and regulatory regime” was exerting severe pressure on the domestic legal cigarette industry.
However, the company said it has consolidated its leadership position in the industry.
Some of the key interventions during the quarter include launch of variants such as Hollywood (triple segment filter) and Flake Taste Pro (dual segment filter). Additionally, two brands, American Club and Players, which were launched towards the end of 2016-17 will be scaled up, ITC said in a media statement
Pressure on cigarette industry volumes, an adverse quality and leaf cost escalation pertaining to Andhra Pradesh’s 2017 crop, and lower export incentives weighed on the agri-business results that saw PBT dip by 17 per cent on a year-on-year basis.
Other segments
The FMCG’s other business – that include branded packaged food, staples, snacks, meals, dairy, beverages, confections, apparels, education and stationery, personal care, safe matches and incense sticks – saw an over 10 per cent jump in gross revenues for the period under review. According to media statement, most major categories enhanced their market standing.
The company added that capacity utilisation was scaled up in the integrated consumer goods manufacturing facilities at Kapurthala, Panchla and Guwahati.
Over 15 projects are underway and in various stages of development that include land acquisition, site development, construction of buildings, equipment installation and other infrastructure.
Increased room rates in hotels and strategic investments in imported pulp substitution for the paperboards saw both the businesses report higher PBT numbers on an Y-o-Y basis.