Core business buoys ITC profit

BS 200 SCORECARD

ITC has reported 18 per cent or Rs 107 crore rise in profit after tax (PAT) at Rs 679 crore in the second quarter (ended September 30) of this financial year over the comparable quarter of the last financial year.

The rise in PAT came from Rs 888 crore increase in gross income of the company to Rs 4,704 crore in the quarter under review, thanks to sharply higher profits from its cigarette and hotels businesses.

In Q2 of the last fiscal (2005-06), ITC had reported a PAT of Rs 572 crore and gross income of Rs 3816 crore.

ITC's earnings per share in Q2 FY07 rose to Rs 1.80 from Rs 1.52 last year.

With other income remaining virtually flat at Rs 79 crore in Q2 of this financial year, ITC had to absorb Rs 551 crore rise in total expenditure at Rs 1,914 crore, mainly on account of Rs 437 crore increase in raw material costs to Rs 1,242 crore.

The company's profit before tax (PBT) grew by Rs 142 crore to Rs 957 crore in the quarter under review over Q2 of 2005-06, while its tax bill climbed by Rs 36 crore to Rs 278 crore.

Cigarettes continued to be the mainstay of the company's bottomline, with the cigarette division contributing Rs 786 crore to its PBT. The hotels division reported a PBT of Rs 57 crore, the agri-business unit Rs 46 crore and the paperboards, paper and packaging division Rs 110 crore.

The other FMCG products division, which comprises businesses such as garments, stationery, matches and foods, reported an increased loss of Rs 48 crore in the September quarter this year from Rs 35 crore loss in Q2 of 2005-06.

In terms of revenues, cigarette sales rose to Rs 3,101 crore (from Rs 2,723 crore in Q2 FY06), other FMCG to Rs 409 crore (Rs 246 crore), hotels to Rs 200 crore (Rs 153 crore), agri-business to Rs 868 crore (Rs 465 crore) and paper products group to Rs 522 crore (from Rs 469 crore).

ITC said the other FMCG business group had to absorb the business development and gestation costs that included the cost of launches, while the agri-business division continued the expansion of its e-choupal network, besides sourcing raw materials for its foods business and leaf tobacco for the cigarettes business and agri-commodities for exports and domestic markets.

In the first half (H1) of FY07, ITC's PAT rose by Rs 201 crore to Rs 1,331 crore on the back of Rs 1,647 crore rise in gross income to Rs 9,423 crore, and H1 PBT increased by Rs 279 crore to Rs 1,924 crore.