Nudged by ITC’s results for the quarter ended December 31, shares price of the consumer goods major opened up by 1% on Saturday trading at a price of Rs 236.60. The company posted an increase in profit after tax of 29% as gross revenue went up to Rs 11,912, a gain of 5% year on year. The company in a release said that the hotel business along with the agriculture business segment helped in revenue growth.
ITC said that the hotels segment posted a 22.2 per cent increase in revenue. Total Comprehensive Income stood at Rs. 3777 crores compared to Rs 3637.01 crores in the previous year. Earnings Per Share for the quarter stood at Rs. 3.37.
Among FMCG segment revenue, cigarettes contributed Rs 5,310 an increase of Rs 237 crore from the same quarter last year. ITC said, “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.”
Hotels segment helped the Kolkata based conglomerate grow in the quarter ended December 2019, posting strong revenue. ITC said that its existing and new properties showed all-round improvement as food and beverage sales improved. “The Business also made steady progress during the quarter in the construction of an ITC Hotel in Ahmedabad and Welcomhotels in Guntur & Bhubaneswar,” ITC said in the release.
Agriculture business revenue grew by 8.8% as the Business leveraged trading opportunities, especially in Oilseeds, Pulses & Coffee and scaled up its portfolio of value-added products, according to ITC.
ITC claimed that revenue in its paperboards, paper & packaging segment revenue “witnessed muted growth on a relatively firm base due to slowdown in the FMCG and liquor industry,” while claiming that, “The Company continues to mitigate the impact of the slowdown through several proactive measures such as enhancing direct reach, introducing targeted relevant offers for value-seeking consumers, investing in fast-growing channels and extending credit judiciously to select trade partners.”
Ahead of Nirmala Sitharaman’s second budget, S&P BSE Sensex opened 210 points, 0.52 per cent higher at 40,513.50, while the broader Nifty 50 index ruling at 11,962, down 74 points, or 0.61 per cent. Consumer goods manufacturers along with real estate and the auto industry are hopeful that the Finance Minister will announce a slew of measures to boost consumption.