Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Companies / ITC Q4 net profit up 14.6% to Rs650 crore
BackBack

ITC Q4 net profit up 14.6% to Rs650 crore

ITC Q4 net profit up 14.6% to Rs650 crore

Premium

The country’s biggest cigarette maker, ITC Ltd, posted a fourth quarter (Q4) net profit of Rs650.69 crore, up 14.6% from the year-ago period as sales rose 24.5% to Rs3,466 crore.

Analysts said they were disappointed with the performance as the Q4 pace was slower than the first nine months.

“Hotels and agri-business performance are below expectations," said Sandeep Nanda at Sharekhan Ltd. He estimated that the lower margins were due to the firming up of the rupee during the last quarter. “This seems to have hit the hotels business as well as the company’s earnings from agricultural exports," he added.

Abhijit Kundu, a researcher at Prabhudhas Leeladhar Pvt Ltd, attributed the lower-than-expected margins to the higher marketing expenditure incurred on cigarettes and non-cigarette fast moving consumer goods (FMCG) division.

For the year, ITC saw its net profit climb by 20.8%, propped up by better performance in its non-cigarette businesses. The company’s board approved a plan to consolidate a part of its FMCG business under the new strategic business of home and personal care products.

The company’s net profit stood at Rs2,700 crore up from Rs2,235 crore in the previous year. Gross income rose 20.18% to Rs19,842 crore from Rs16,511 crore.

The cigarette maker, which pays heavy excise duty in its line of business, reported sales of Rs12,369 crore, about 26% higher than the previous year’s Rs9,790 crore.

Though cigarettes continue to contribute most to ITC’s bottom line, its share mildly slipped to 82.15% of the profit compared with the previous year’s figure of 83.67%. This was primarily enabled by the hotels and agri-business division, which contributed more to the bottom line.

Hotels, with an almost 36% higher margin of Rs350.75 crore, pitched 9.08% (7.97% previous year) to the company’s profits. The agri-business division, which registered a similar growth, contributed 3.2% (2.80% previous year) to the profit.

ITC, which has already got three businesses in the consumer segment, namely the stationary business, including greeting cards and gift items, incense sticks and match sticks, is now planning to consolidate them along with the personal care products line it kicked off with Essenza Di Wills. The company voiced concern about cigarettes being brought under the ambit of VAT (value-added tax) by the states at a rate of 12.5%, with no reduction in excise duties collected in lieu of state-level sales tax. ITC’s board recommended a dividend of Rs3.10 per ordinary share of Re1 each.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Published: 26 May 2007, 12:42 AM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App