ITC Q3 profit rises 21% on better cigarette sales

Tags: News

FMCG business recorded 30% y-o-y growth in net sales to Rs 1,783 crore

Riding on successful rollout of low cost products, market acceptance and significant volume growth in cigarette sales, country’s biggest cigarette maker ITC notched up almost 21 per cent higher net profit in the Q3. The net profit of the company reached Rs 2,051.85 crore on net sales of Rs 7,627.07 crore, which in turn was up by 23 per cent (from Rs 6,196.43 crore in the same quarter, last financial year). This incidentally was above market expectations.

While cigarettes business posted a 13.1 per cent y-o-y growth in net sales to Rs 3,657 crore albeit thanks mostly to price hikes, other FMCG business recorded 30.1 per cent y-o-y growth in net sales to Rs 1,783 crore, agri-business witnessed 43.1 per cent y-o-y growth in net sales to Rs 1,631 crore, hotels and papers and packaging businesses posted topline growth of 11 per cent and 8.5 per cent, respectively.

An official communiqué from the company on Friday said, “The stellar performance by the company is particularly remarkable when viewed against the backdrop of challenging business environment in which it was achieved, namely, a slowdown in economic growth, sustained high inflation and impact of steep hike in taxes on cigarettes during the year.”

Although the cigarette business continued to be impacted by a discriminatory taxation and regulatory policy framework, cigarette category contributed as much as Rs 3,657.36 crore in the total FMCG kitty of Rs 5,440.06 crore. And ITC felt that the introduction of new variants, product enhancements ac­ross its cigarettes brand portfolio during the quarter led to further consolidation of market standing. “Despite these challenging conditions, the company’s cigarettes business, through its relentless focus on providing differentiated and world-class products to consumers, sustained its leadership position in the industry,” the communiqué said.

The growth in the hospitality vertical was muted during the quarter as the sector continued to be adversely impacted by the weak economic conditions prevailing in key international source markets and India, ITC said.

When it comes to personal care range, the product portfolio was strengthened during the quarter with the launch of the ‘Couture Spa’ range of soaps under the ‘Fiama Di Wills’ brand.

“The new product/variant launches have received encouraging consumer response,” the company said.

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