Almost in line with market expectations, cigarettes-to-hotel major ITC on Wednesday reported a 10.5% year-on-year jump in its standalone net profit to R2500 crore for the quarter ended September 30 from R2262.50 crore for the year-ago period as its total income posted close to 8% y-o-y growth.
Backed by a 7% y-o-y growth in cigarette revenue and over 13% y-o-y growth in other FMCG business revenue, the diversified conglomerate’s total income grew to R13616.61 crore in the September quarter from R12611.29 crore during the corresponding period year ago.
ITC’s cigarette business revenue rose to R8528.47 crore during the July-September period this fiscal from R7963.10 crore during the same period a last fiscal, according to a BSE filing.
Operating profit from its cigarette business increased by more than 8% y-o-y to R3,217 crore during the quarter under review, despite continued pressure on the legal cigarette industry in India.
The country’s biggest cigarette maker, in a statement, said performance of its cigarette business during the quarter remained subdued on the back of pressure on the legal cigarette industry.
“The operating environment for the legal cigarette industry in India was rendered even more challenging in the wake of a further increase of 10% in Excise Duty announced in the Union Budget 2016 and introduction of the new 85% graphic health warnings (GHW) on cigarette packages,” it added.
The company’s FMCG-Others segment, which includes branded packaged foods, apparel, personal care products, and education and stationery products, registered a revenue growth of 13.3% y-o-y to R2,672 crore during the second quarter. The FMCG major said most major categories recorded improvement in market standing during the period amidst weak demand conditions.
“The branded packaged foods businesses posted healthy growth in revenue led by Noodles, Staples, Snacks and Biscuits categories despite sluggish demand conditions prevailing in the industry,” the company said. The conglomerate’s Hotel segment’s revenue during the quarter was flattish at R297.34 crore in comparison to the corresponding period in the previous year.
Operating conditions in the Indian hospitality industry continued to be impacted by excessive room inventory in key domestic markets and sluggish macroeconomic environment both in India and major source markets, according to it.