ITC Ltd on Thursday posted a subdued 3.61 per cent rise in net profit at Rs 2,265.44 crore for the first quarter ended June 30, due to pressure on cigarette sales and sluggish demand for other FMCG products.
The Kolkata-based company had posted a net profit of Rs 2,186.39 crore during the same period of 2014-15 fiscal.
Net sales of the company, however declined 7.18 per cent to Rs 8,505.53 crore for the quarter under review as against Rs 9,164.42 crore during June quarter of the previous fiscal, ITC Ltd said in a statement.
“The company’s performance during the quarter was subdued reflecting the unprecedented pressure on legal cigarette industry volumes, sluggish demand conditions prevailing in the FMCG industry and lack of trading opportunities in wheat and soya,” the company said.
The performance of the cigarette business during the quarter reflects the extremely challenging operating environment for the legal cigarette industry in India which is facing unprecedented pressure on sales volumes, it said.
The company’s net sales in the cigarette vertical stood at Rs 2,781.10 crore for the first quarter, compared to Rs 2,721.75 crore in the same period of the previous fiscal.
Its FMCG business, comprising branded packaged food and apparel verticals among others, posted a net loss of Rs 7.97 crore for the first quarter, compared to Rs 15.59 crore during the same period of 2014-15 fiscal.
The company’s agri business posted net sales of Rs 233.85 crore in the period under review, compared to Rs 202.45 crore in the same period of previous fiscal.
ITC said its Paperboards, Paper and Packaging segment continued to be impacted by the slowdown in the FMCG and cigarette industry.
The segment reported net sales of Rs 254.44 crore during the first quarter, compared to Rs 274.90 crore in the same period of previous fiscal.
Shares of ITC were trading at Rs 312.25 apiece on the BSE, up 2.73 per cent from previous close.