ITC Q3 Net Jumps 21% - The Economic Times
January 19, 2013
Sales of cigarettes-to-hotels conglomerate rise 23% to Rs. 7,627.07 crore
Cigarettes-to-hotels conglomerate ITC Ltd said third-quarter net profit jumped 20.6% year-on-year to Rs. 2,051.85 crore on the back of strong growth in its FMCG and agricultural businesses. ITC said on Friday net sales for the quarter-ended December rose 23.1% from a year ago to Rs. 7,627.07 crore. Net sales from its FMCG business grew 30% while revenue from its agri-business was up 43%. Investors cheered the news, pushing ITC's shares up to Rs. 289.7 in intra-day trade on the Bombay Stock Exchange on Friday. The scrip closed 0.67% higher at Rs. 287.05.
"The FMCG business and agribusiness is going to drive ITC's growth next quarter as well, since we do not expect any significant improvement in the cigarette business volume or the hotel business," said KaustubhPawaskar, research analyst at Sharekhan. Revenue of the company's flagship cigarette business grew by more than 13% to Rs. 3,657.36 crore, despite a steep hike in taxation,whichhasledto10-17% increase in cigarette prices over the last two quarters.
In volume terms, ITC's cigarette business grew by 1.25%, according to Religare Institutional Research. Sharekhan'sPawaskar attributed the growth in revenue from the cigarette segment to the price hike and ruled out any significant jump in volumes in the next quarter.
ITC said its sub-65 mm cigarettes, launched to fight illegal trade and offer an entry-level pricing, has received favourable response and the company is now planning a nationwide rollout.
Net sales of the company's non-cigarette FMCG business, which comprises packaged food and personal-care products, grew 30% to Rs. 1,782.70 crore. The segment reduced losses by 50% to Rs. 23.98 crore during the quarter.
ITC said sales growth of its packaged food business was led by its biscuit brand Sunfeast, Sunfeast Yippee! noodles and Bingo! range of snacks.
In personal care, the company strengthened its presence in soaps with a premium range and also launched newer products in the deodorants, body lotion, hand moisturiser and skin toner segments. However, ITC's hotel business failed to make a significant recovery during the quarter. The company attributedthistothecontinuing weakness in the domestic and global economy and a significant addition of rooms in several markets. Sales in this segment grew 11% to Rs. 309.46 crore, while profitability was down 45% to Rs. 55.49 crore.
