FMCG firm ITC on Thursday reported an increase of 10 percent in standalone net profit at Rs 2,385 crore for the first quarter ended June 30, 2016. ITC, which accounts for three out of four cigarettes sold legally in the country, however said its business in this segment remained subdued. The higher growth in TCI relative to net profit is attributable to a positive swing of Rs 148.34 crore in other comprehensive income primarily on account of favourable movement in fair value of the company’s strategic investments in equity.
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FMCG losses shrunk to Rs 4.52 crore from Rs 7.97 crore in the same period previous year. ITC’s cigarette business contributes over 80 per cent to the company’s profit, so robust performance in this segment is critical for ITC, they added.
According to Edelweiss, ITC’s cigarette sales volume in the quarter went up 3-4% year-on-year as compared to an initial estimate of 2%.
ITC’s revenue from operations for the quarter stood at Rs 13,156.68 crore representing a growth of 8.3%. The company reported June quarter results after market hours.
ITC’s second-biggest business segment, agri produce, grew by a handsome 20% at Rs 2,794 crore driven by domestic agri commodity sales and leaf tobacco exports although Ebidta remained stagnant at Rs 237 core against 234 crore year ago due to pricing pressure.
In the non-cigarette FMCG business – which ITC is betting on as its future growth driver – sales rose 9.5% to.’2,385.6 crore, while losses reduced to.’4.52 crore from Rs 7.97 crore.
Religare retained its “buy” call on ITC with a target price of Rs 270.
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On a sequential basis though, net profit for the Pune-based Information Technology company declined by 41 per cent against a profit of Rs 93.6 crore in Q4 16.
