ITC Q3 net up 10.5% at Rs2,635 crore

ITC Ltd has reported a 10.5-per cent increase in its net profit for the quarter October-December 2014 at Rs2,635 up from Rs2,385 crore during the comparable quarter of the previous financial year.

ITC, which is into cigarettes, hotels and a whole lot of consumer products, said profit before tax also recorded a similar increase at Rs3,800.19 crore during the quarter.

Earnings per share for the quarter stood at Rs3.30.

Net sales during the October-December 2014 quarter rose 2.05 per cent to Rs8,800 crore compared to Rs8,623 crore in the year-ago quarter.

Cigarettes remained the major revenue source with over 47 per cent share and around 76 per cent to the profits before tax (PBT). Cigarettes, however, witnessed a low growth in revenues - of around 0.63 per cent - to Rs4,142 crore on a year-on-year basis (Rs4,116 crore). PBT grew approximately 9 per cent to Rs2,886 crore.

The company's performance for Q3 FY'15 reflects, inter alia, the full impact of the steep hike in excise duty on cigarettes announced in the union budget 2014 and sharp increases in VAT on cigarettes by Tamil Nadu, Kerala and Assam effected during the quarter, ITC said in a release.

Revenue from cigarette sales remained flat during the quarter compared to same period last year. This, coupled with a de-growth in agri business revenue - primarily due to lack of trading opportunities in Soya - led to a muted growth of 2.1 per cent in net revenue for the quarter, the release added. 

On a quarter-on-quarter comparison (July-September 2014 and October-December 2014) revenues and profits in cigarettes fell by Rs109 crore (2.5 per cent decline) and Rs4 crore (0.13 per cent).

ITC said a slowdown in the cigarette segment impacted its paper boards, paper and packaging segment revenue. Other FMCG segments registered healthy revenue growth of 11.4 per cent amidst continuing weakness in discretionary demand.

The branded packaged foods businesses posted a healthy growth in revenues and enhanced market standing across categories by leveraging its portfolio of differentiated and innovative products.

The personal care products business continued to make steady progress in the wash and deodorants categories. The 'Engage' range of deodorants, including the recently launched Cologne variants, continued to receive good response from consumers and grew at a rapid pace during the quarter.  

The hotels industry continued to be impacted by a weak pricing scenario in the backdrop of excessive room inventory in key domestic markets.

While segment revenue registered a growth of 4.7 per cent, segment results were  impacted by additional depreciation charge for the quarter due to revision in the useful life of fixed assets in accordance with the provisions of Schedule II to the Companies Act, 2013 and gestation costs of new properties - ITC Grand and My Fortune.