Kolkata: :ITC Ltd, India’s biggest cigarette maker, said second-quarter profit rose 21.5% from a year earlier, driven by the robust performance of almost all its business segments except hotels.
Net profit rose to Rs 1,514.31 crore in the three months ended 30 September from 12,46.74 crore in the year earlier, the company said in a release.
Total revenue gained 17.5% to Rs 5,974.18 crore.
Kurush Grant, executive director, ITCLtd at Kolkata CTD on 3 September, 2011 photo by Indranil Bhoumik/Mint.
Net revenue from cigarettes—ITC’s main money spinner—increased 16.4% to Rs 2,968.14 crore.
Margins expanded and operating profit from cigarettes jumped 18.5% in the September quarter to Rs 1,728.9 crore. Operating profit from other businesses grew 31% to Rs 486 crore.
ITC stock rose 1.6% to Rs 206.90 on the Bombay Stock Exchange, while the bourse’s benchmark Sensex gained 0.92%.
“Despite price hikes, sales by volume appear to have grown this quarter,” said Himani Singh, research analyst at Elara Securities (India) Pvt. Ltd, describing the numbers as “positive”. “It has boosted our confidence in the stock.”
The company managed to narrow losses in its non-cigarette fast-moving consumer goods (FMCG) business to Rs 55.9 crore from Rs 66.9 crore in the year earlier, while the segment’s net revenue jumped 27% to Rs 1,340.66 crore.
“The branded packaged foods business continued to expand rapidly with sales and profitability improving across categories,” ITC said. “The business continues to invest in manufacturing and distribution infrastructure to support larger scale in view of growing demand.”
Operating profit from the paper and paperboards segment rose 17.9% to Rs 289.7 crore in the quarter ended 30 September, while revenue rose 9.4% to Rs 1,005.42 crore.
The growth in the segment was driven by a combination of “product mix enrichment, higher realizations and enhanced value capture through fully integrated operations,” ITC said.
Higher trading volumes and improved realizations from soya, wheat and coffee shored up ITC’s operating profit from its agri business segment to Rs 238.78 crore, 15% higher than the corresponding period of fiscal 2011.
Revenue from the segment grew 12.9% to Rs 1,434.54 crore.
Revenue from the hotel business remained flat compared with last year at Rs 234.31 crore because of “challenging” market conditions, ITC said, but operating profit from grew 8.9% to Rs 43.44 crore.