ITC hits one month low post September quarter earnings

The stock was down nearly 3% at Rs 331 on the Bombay Stock Exchange.

ITC is trading lower by nearly 3% at Rs 331 on the Bombay Stock Exchange (BSE), after reporting lower than expected revenue and net profit growth for the second quarter ended September 2013 (Q2).

The stock opened at Rs 338 and touched a low of Rs 330, its lowest level since September 13 on the BSE. The stock, which has nearly 11% weightage on the S&P BSE Sensex, was the biggest drag on markets. ITC contributed nearly 55 points fall in benchmark index Sensex, which was up around 25 points at 1008 hours.

The cigarette-to-hotels major’s net sales were disappointing at 8.8% year on year (yoy) to Rs 7,776 crore, which was below an average analysts estimate of Rs 8,087 crore.

While cigarettes business posted a modest top-line growth of 10% yoy impacted by higher than expected de-growth in volumes, the growth in other FMCG business too tapered to 16.1% yoy due to sluggishness in demand.

The company’s profit after tax grew 21.5% yoy at Rs 2,230 crore, aided by write back of Rs 158 crore of liability towards rates and taxes pertaining to earlier years. The company also wrote back Rs 35 crore of interest pertaining to the aforesaid liability.