ITC Q1 net profit rises 13% to Rs3,174 crore

ITC Ltd has posted a net (after-tax) profit of Rs3,173.94 crore for the fiscal first quarter ended 30 June 2019, a growth of 12.6 per cent year-on-year, amidst sluggish demand conditions. Gross revenue for the quarter stood at Rs11,361.35 crores, showing a growth of 6 per cent.

ITC said the gains were driven mainly by paperboards, hotels and FMCG-others (excluding the lifestyle retailing business). 
Total comprehensive income stood at Rs2960.93 crore (Rs2897.10 crore in the previous year). Earnings per share for the year stood at Rs2.59 (previous year Rs2.31).
ITC’s gross revenue from flagship cigarette business grew 5.9 per cent to Rs5,433.4 crore during the quarter, while the business profit went up by 8.1 per cent to Rs3,849.13 crore. ITC said the performance during the quarter was impacted by weakness in overall demand apart from the challenges to the legal cigarette industry due to high taxation and regulatory regime. 
Revenue from FMCG-others segment was up 8 per cent on a comparable basis amidst sluggish demand conditions. Segment EBITDA rose 41 per cent to Rs181 crore, notwithstanding stepped up investments in brand building, gestation and start-up costs of new categories/new facilities.
The FMCG-Others Segment delivered a resilient performance during the quarter led by atta, potato chips, premium cream biscuits and noodles in the branded packaged foods business, liquids (handwash and bodywash) in the personal care products businesses and notebooks in the education and stationery products business.
ITC, which operates the country’s second largest hotel chain, reported 15% growth in hotel business segment revenue at Rs 392.59 crore during the quarter, while segment result was down to Rs 10.39 crore (Rs 13.22 crore) which the company attributed to additional depreciation pertaining to new properties. The company, however, said hotel business EBITDA grew by 18% during the quarter and the newer properties in Hyderabad, Goa and Kolkata reported good response. 
Hotels segment revenue was up 15 per cent driven by robust performance of new properties, amidst relatively soft demand conditions. While segment EBITDA grew 18 per cent, ITC said, additional depreciation pertaining to new properties weighed on segment results. ITC Royal Bengal, Kolkata commissioned on 1 June 2019, has received excellent initial response.
The conglomerate’s paperboards, paper and packaging segment posted 12.6 per cent jump in revenue at Rs1,527.53 crore driven by strong growth in value-added paperboards segment and product mix enrichment. However, the packaging and printing business was impacted by slowdown in the FMCG industry and exports. 
The agri-business reported 14.6 per cent growth in gross revenue at Rs 3611.23 crore.
In the agri-business segment, ITC said, subdued demand for leaf tobacco in international markets, steeper depreciation in currencies of competing origins in recent years, limited trading opportunities in oilseeds and pulses and adverse business mix weighed on segment results.