ITC Q3 profit rises 16.75% to Rs3,090.2 crore on all-round profitability

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Kolkata: Cigarette and consumer goods maker ITC Ltd on Friday said its fiscal third-quarter profit rose 16.8% from a year earlier, boosted by a one-time reversal of a provision of Rs412 crore.

Net profit rose to Rs3,090.20 crore in the three months ended 31 December from Rs2,646.73 crore in the year earlier.

Adjusted for the one-time exceptional income, the company’s net profit in the December quarter grew 1.1% year-on-year (y-o-y), Edelweiss Securities Ltd said in a note.

The company’s operating profit grew 10.1% to Rs3,904.5 crore from a year earlier, slightly lower than the expectations of HDFC Securities Ltd, its analysts Naveen Trivedi and Siddhant Chhabria said in a report.

Adjusted for a change in the tax regime, ITC’s gross sales value, or comparable gross revenue, grew 6.3% over last year to Rs16,746.2 crore, the company said in a statement. ITC’s performance was in line with Edelweiss’s estimates, its senior vice-president Abneesh Roy said in his report.

On Friday, ITC’s shares rose 0.37% to close at Rs273.85 on BSE, while the benchmark Sensex gained 0.71% to close at 35,511.58 points.

Though ITC’s pre-tax profit from cigarettes at Rs3,269.25 crore was up 7.7% year-on-year—a “healthy growth”, according to HDFC Securities—Edelweiss estimates cigarette sales by volume to have declined by around 5% in the December quarter. The tobacco industry faced “severe pressure due to sharp increase in taxes”, ITC said in its statement. All combined, taxes on cigarettes have tripled since 2011-12, claimed ITC.

Other consumer goods sold by the company, such as packaged food and personal care products, registered robust growth and turned in a pre-tax profit of Rs47 crore in the December quarter as against a loss of Rs19.66 crore in the same period a year ago.

Adjusted for a change in accounting norms due to the introduction of the goods and services tax, the company said its gross sales value, or revenue, from the segment rose 16.2% over the same period last year to Rs2,871.78 crore.

The company’s pre-tax profit from the hotels segment grew 30% over last year to Rs54.77 crore while segment revenue grew 10% to Rs404.44 crore. Room tariffs firmed up while sales of food and beverage also shot up, ITC said in its statement.

The paper and paperboards segment turned in a pre-tax profit of Rs268.26 crore, 9% higher than the same period last year, even as revenue from the segment contracted 4.2% to Rs1,279.6 crore.

Sales of farm commodities also slowed due to a shortage of leaf tobacco, the company said, but its profit margin from the segment expanded. Revenue from the segment fell 8.4% y-o-y to Rs1,530.86 crore, while pre-tax profit fell marginally to Rs233.34 crore from Rs236.61 crore a year ago.livemint