Mumbai: New Delhi: ITC Ltd, India’s largest cigarette maker, on Friday reported a 29.07% jump in its December quarter stand-alone profit, beating Street estimates. Net profit rose to ₹4,141.93 crore in the three months ended 31 December, up from ₹3,209 crore a year earlier, the company said in a filing to the stock exchanges on Friday evening. Revenue from operations at the maker of Bingo chips, and Gold Flake cigarettes for the quarter grew 5% from the year-ago period to touch ₹12,013.01 crore, according to a statement made by the company to the stock exchange.
"The macro-economic environment continues to be adversely impacted as reflected in deceleration in GDP growth, and persistent weakness in consumption demand and investments. Delayed arrival of the Kharif crop due to spatial variations in rainfall especially close to the harvest season, commodity price inflation together with disruptions in certain parts of the country exacerbated the already challenging operating environment during the quarter. The Company posted a steady performance during the quarter amidst a particularly challenging operating environment as aforestated," the company said in a statement to the media on Friday.
ITC's third quarter earnings came ahead of Street expectations.
A Bloomberg poll of 23 analysts had estimated ITC’s profit for the quarter at ₹3,876 crore, with stand-alone revenue projections at ₹12,078.9 crore, Mint reported earlier.
During the quarter, the cigarettes business of ITC grew by 4.7% to touch ₹5,310.98 crore.
"Performance during the quarter reflects the persistent weakness in the overall demand environment, especially in rural markets and wholesale channel, tight market liquidity conditions and the increasing salience of illicit trade especially at the premium end," the company said of its cigarettes business in its statement.
Meanwhile, the company’s FMCG-others business put up a sluggish performance during the quarter as the company registered moderate growth rates in both urban and rural markets much in line what other makers of fast moving consumer goods have been witnessing.
ITC said that products that sell more in India's villages were especially impacted.
The FMCG-others business comprising packaged foods, apparel, stationery, personal care, and other products grew by 3.47% to ₹3,312.32 crore.
Excluding the Lifestyle retailing business, segment revenue for FMCG-Others grew by 6.1%. Segment EBITDA grew by 48% to ₹256 crores, with margins expanding by 230 basis points, despite stepped up marketing investments, gestation and start-up costs of new categories and new facilities and uptick in input costs, the company said in its statement.
"The FMCG-Others Segment delivered a resilient performance during the quarter which witnessed a slowdown in overall growth rates both in urban and rural markets. Categories with relatively higher rural salience remain the most impacted," the company said.
ITC said it has been trying to mitigate the impact of the slowdown by expanding direct reach, introducing offers for value seeking consumers, investing in fast growing channels, and extending credit judiciously to select trade partners.
On Friday, ITC Ltd reported a 22.23% growth in its hotels business at ₹552.31 crore. There was all-round improvement, with both existing and new properties recording robust increase in RevPAR and F&B sales. Higher room rates and operating leverage aided margin expansion, the company added.
The paperboards, paper and packaging segment revenue was up 0.83% to Rs1,555.37 crore. The continued to be impacted by the subdued demand environment prevailing in the FMCG and liquor industry.