ITC profit rises 34%, sales 24%

BS 200 SCORECARD

ITC today beat all expectations with a rise in sales at Rs 3,166 crore and net profit at Rs 717 crore in the third quarter of this financial against sales of Rs 2,556 crore and profit of Rs 537 crore in the third quarter last year. While the rise is net profit has been 33.52 per cent, sales have seen a growth of 23.87 per cent.

Sources said buoyant revenues from its cigarettes, paper and hotels businesses helped improve profits while sales growth was aided by these divisions as well as strong sales of its non-cigarette consumer products like foods. 
 

Rs crore	Quarter ended Dec
	2005	2006
Net sales	2556.04	3165.57
Other income	48.88	69.79
Total income	2604.92	3235.36
Expenditure	1677.70	2082.77
Net profit	582.27	717.40

ITC shares rose 0.75 per cent to close at Rs 173.70 as against the previous close of Rs 172. 40. It had hit an intra-day high of Rs 178.25 today on BSE.

Paperboard, agriculture and retail businesses were helped by innovative business models such as its e-choupal chain of information technology-based rural marts, its choupal-sagar rural malls and corporate governance initiatives such as social forestry and rainwater harvesting.

With cigarettes still contributing more than 60 per cent to revenues, ITC gained from a hike in prices of key brands ahead of the expected imposition of value-added tax (VAT) on cigarettes.Cigarette sales rose 14 per cent, while revenue from its other consumer goods businesses rose 67 per cent.

The hotels and agri-business divisions were expected to do better in the January-March quarter as they are likely to see an upswing in the quarter. Cigarette sales could experience a blip owing to imposition of VAT, said the sources.

ITC's non-cigarette businesses grew 31 per cent during the quarter and now account for 52 per cent of net turnover. Earnings per share stood at Rs 1.91.

Branded packaged foods sales grew 65 per cent over the last year while the lifestyle retailing business grew 38 per cent through its chain of 39 large format retail stores, 156 multi-brand outlets and 39 Wills Lifestyle stores, with 15 more to open in malls in the next few months.

Stationery sales increased 27 per cent over the year-ago period, while the safety matches business reported improved realisations, higher share of value added products in overall sales, freight optimisation and other supply chain efficiencies.

Sales of paper and paperboards rose to Rs 543 crore (from Rs 489 crore) and PBTEI to Rs 104 crore (Rs 91 crore), while hotel revenues rose to Rs 281 crore and PBTEI to Rs 118 crore in the third quarter of this fiscal from revenue of Rs 219 crore and PBTEI of Rs 76 crore in the year-ago period.

Similarly, agribusiness revenues rose to Rs 782 crore and PBTEI to Rs 21 crore from Rs 654 crore and Rs 14 crore, respectively, in Q3 of the last fiscal. Cigarette revenues rose to Rs 3,278 crore and PBTEI to Rs 828 crore from the corresponding figures of Rs 2880 crore and Rs 692 crore last year.