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ITC profit declines an unexpected 4.3%

ITC profit declines an unexpected 4.3%
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First Published: Wed, Jul 30 2008. 11 35 PM IST
Updated: Wed, Jul 30 2008. 11 35 PM IST
Mumbai: India’s top cigarette firm, ITC Ltd, on Wednesday reported an unexpected 4.3% fall in quarterly net profit. The Kolkata-based company said net profit fell to Rs749 crore in its fiscal first quarter to end-June from Rs783 crore a year earlier. Net sales rose to Rs3,900 crore from Rs3,325 crore.
That compared with a Reuters poll forecast of a net profit of Rs855 crore on net sales of Rs3,655 crore.
ITC, 31.7% owned by British American Tobacco Plc., also has interests in retail and packaging, and is expanding a range of foods and personal care products to cut its dependence on cigarettes, which have been hit by higher taxes.
Rising incomes and expansion of modern retail are boosting demand for everything from shampoo to biscuits, but higher prices of raw materials such as palm oil and wheat are hurting margins, while record high inflation is crimping consumer spend.
Rival Hindustan Unilever Ltd last week posted a better-than- expected 13% rise in quarterly profit to Rs558 crore.
ITC shares ended 1.1% lower at Rs187.80 in a firm Mumbai market. Chairman Y.C. Deveshwar said ITC would invest in the shares of firms that have similar business interests as ITC. The firm, with cash and liquid investments of around Rs2,700 crore, said in its annual report that its investment subsidiary Russell Credit Ltd had bought 2.3 million shares of Ballarpur Industries Ltd.
“Our investment managers will continue to make such investments if they see value,” Deveshwar said.
Deveshwar said subsidiary ITC Infotech India Ltd is close to acquiring a software development firm in the US, without disclosing substantial details.
Aniek Paul of Mint contributed to this story.
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First Published: Wed, Jul 30 2008. 11 35 PM IST