ITC Q1 net profit rises 10% to Rs 2,385 crore

FMCG major ITC today reported an over 10 per cent rise in its standalone net profit at Rs 2,384.67 crore for the April-June quarter in spite of a challenging operating environment amid continued pressure on legal cigarette industry.
The company had posted a net profit of Rs 2,166 crore in the corresponding quarter of FY2015-16.
The Kolkata-based company also reported an increase of 8.28 per cent in net sales to Rs 13,156.68 crore for the quarter under review as against Rs 12,150.48 crore a year earlier, ITC said in a BSE filing.
"The company delivered steady performance during the quarter despite a challenging operating environment marked by continuing pressure on legal cigarette industry volumes and persistently sluggish demand conditions prevailing in the FMCG industry," it said.

However, operating conditions in hotels and paperboards, paper and packaging segment remained subdued, the FMCG giant said.
ITC's overall expenses during the quarter moved up 8.11 per cent to Rs 9,988 crore as against Rs 9,238 crore in the corresponding period of 2015-16.

Revenue from the total FMCG business including cigarettes increased 7.11 per cent to Rs 10,615.75 crore from Rs 9,910.93 crore in the corresponding quarter a year ago.
During the quarter, revenue from cigarettes increased 6.42 per cent to Rs 8,230.60 crore from Rs 7,733.43 crore in the year-ago period.
"Despite the challenging operating environment, the company continues to consolidate its market leadership through relentless focus on delivering world-class products, continuous innovation and value addition and best-in-class execution," ITC said.

Revenue from FMCG-Others segment was up 9.53 per cent to Rs 2,385.15 crore during the April-June quarter as against Rs 2,177.50 crore in the year-ago period as most categories witnessed margin expansion driven by enhanced scale of operations and product mix enrichment.
"Segment results recorded improvement in comparison to the corresponding period in the previous year despite higher investment in brand building, consumer and trade promotion activities and gestation costs relating to new categories, viz juices, dairy, gums and health and hygiene segment," it said.
However, revenue from its hotel business was down marginally by 0.16 per cent to Rs 287.36 crore during the quarter as against Rs 287.83 crore in the corresponding period last fiscal as it continued to be impacted by a weak demand and pricing scenario against the backdrop of excessive room inventory in key domestic markets.

"Although segment results improved as compared to the corresponding quarter in the previous year, the same remained muted due to the challenging business context as aforestated and gestation costs of the recently commissioned ITC Grand Bharat, Gurgaon," the company said.