Diversified group ITC on Friday reported a 7.75 per cent drop in its profit before tax at Rs 4,743.47 crore for quarter ended March 31, owing to a sharp decline in consumption, especially in rural areas due to the Covid-19 pandemic.
It posted a 4.93 per cent decline in its revenue from operations at Rs 12,560.64 crore during the quarter.
However, owing to tax adjustments following the reduction in corporate tax rates last year, the company received a credit of Rs 340.94 crore, which pulled up its net profit by 9.18 per cent to Rs 3,926.72 crore.
Abneesh Roy, executive vice-president at Edelweiss Securities, said the sales and earnings before interest, taxes, depreciation, and amortisation (Ebitda) performance was in line with the Street expectations.
ITC said in the initial stages, the pandemic had a significant impact on its hotels, education, and stationery products businesses as it coincided with the peak period and the onset of the school season, which were closed owing to the pandemic.
According to ITC, the FMCG segment growth decelerated sharply during the year due to sluggish demand, tight market liquidity and delayed monsoons followed by excessive rainfall in certain parts of the country.
Overall, industry growth rates halved to 7 per cent in the third quarter of the last financial year, with the situation getting worse in Q4 due to the lockdown.
Rural markets, which account for one-third of industry and have been the key driver of growth in recent years, witnessed a steep fall in growth rates.