Kolkata, Oct 19 (IBNS) Meeting the expectations and beating forecasts, India's largest cigarette maker ITC Ltd reported a 21.3 percent rise in second quarterly net profit at to Rs 1,836.42 on Friday.
According to the company, its net revenue jumped 19.6% while the Profit from Operations rose 21.8%. The Profit Before Tax rose by 20.1% while the net profit increased by 21.3%.
ITC´s Non-Cigarette FMCG segment registered a robust revenue growth of 26.4% and improves profitability, the company said.
The Company posted yet another quarter of impressive results with healthy topline growth and high quality earnings.
"This performance is particularly remarkable when viewed against the backdrop of the challenging business environment in which it was achieved, namely, a slowdown in economic growth, sustained high inflation and impact of the steep hike in taxes on Cigarettes during the year," the company said in a release.
Gross Revenue/Income from Operations at Rs 10223.86 crores grew by 19.9% driven primarily by Branded Packaged Foods, Agri business and Cigarettes.
Profit from Operations grew by 21.8% to Rs 2499.41 crores while Profit Before Tax and Net Profit at Rs 2661.10 crores and Rs 1836.42 crores registered a growth of 20.1% and 21.3% respectively. Earnings Per Share for the quarter stood at Rs 2.34.
ITC said despite challenging conditions, the Company's cigarettes business, through its relentless focus on providing differentiated and world-class products to consumers, sustained its leadership position in the industry.
During the quarter, several initiatives were launched across the brand portfolio viz., Classic, Gold Flake, Flake, Navy Cut including pack modernisation, introduction of new variants and limited edition packs leading to further enhancement of market standing. The launches in the new filter segment (cigarette length not exceeding 65 mm) have met with favourable consumer response and the business is rolling out the products to target markets, the company said.
Branded Packaged Foods
The business recorded significant growth during the quarter across all major categories. An enriched sales mix combined with smart commodity sourcing and supply chain optimisation helped enhance profitability. Sunfeast biscuits sustained its robust growth trajectory led by a portfolio of differentiated and innovative products such as Dream Cream, Dark Fantasy Choco Fills. The brand has emerged as the clear market leader in the highly competitive premium cream biscuits segment.
Sunfeast Yippee! Noodles and the Bingo! range of savoury snacks continued to enhance consumer franchise during the quarter, leveraging a highly innovative product portfolio. The business has built a healthy pipeline of innovative variants and product formats to further enhance its market standing in these high growth categories.
Aashirvaad atta further consolidated its leadership position across markets aided by increasing consumer traction for the value added and premium offerings viz. ´Select´ and ´Multi-grain´ variants.
The business continues to invest in disaggregated manufacturing and distribution infrastructure with a view to optimising supply chain costs and improving market servicing.
Personal Care Products
The business sustained its impressive growth trajectory during the quarter with the Soap category garnering significant consumer franchise driven by the ´Vivel Luxury Creme´ and ´Vivel Clear´ variants.
Product portfolio was strengthened during the quarter with the launch of a new variant - 'Exotic Dream' transparent gel bar - in select markets under the Fiama Di Wills brand.
The business rolled out its products in the Skin Care and Shampoo categories to target markets during the quarter. Consumer response to recent launches such as ´Vivel Summer Fair´, a differentiated summer offering for fresh and fair skin, has been encouraging.
EDUCATION AND STATIONERY PRODUCTS
Classmate notebooks registered an impressive growth during the quarter, further consolidating its leadership position in the student notebook category.
The business continues to strengthen the Paperkraft brand, its premium executive and office supplies range. The business has positioned ´Paperkraft´ as the finest green paper for business applications viz. copy-scan-print-fax, leveraging the Company´s world-class fibre line at Bhadrachalam which is India´s first ozone treated elemental chlorine free facility. Paperkraft´s green credentials are supported, among other factors, by the Company´s membership of the prestigious Global Forest & Trade Network, an international initiative of the WWF (World Wide Fund for Nature).
The hospitality sector continued to be adversely impacted by the weak economic conditions prevailing in key international source markets and India on the one hand and significant additions to room supplies in key Indian cities on the other. Consequently, growth in Segment Revenues was muted during the quarter.
During the quarter, the Company unveiled its latest offering in the super premium segment - ITC Grand Chola at Chennai. The hotel has achieved the distinction of being the world's largest ´Leadership in Energy and Environmental Design´ (LEED) Platinum rated hotel under the New Construction category bolstering the unique positioning of ITC Hotels as the greenest luxury hotel chain in the world.
Construction activity of the new luxury properties at Kolkata and at the Classic Golf Resort near Gurgaon is progressing as per plans.
PAPERBOARDS, PAPER & PACKAGING
Segment Revenues grew by 6% during the quarter, aided by improved realisations and product mix enrichment.
Segment Revenues recorded a robust growth of 41% during the quarter aided by wheat exports. Operations at the recently commissioned state-of-the art green leaf tobacco threshing plant in Mysore were scaled up leading to enhanced quality and supply chain efficiencies. The business continues to provide strategic sourcing support to the Company's Cigarettes and Branded Packaged Foods business by ensuring high quality supplies at competitive costs.