Cigarettes and tobacco major ITC Ltd on Friday reported a 22 per cent growth in net profit for the third quarter of 2002-03, on the back of a 12 per cent growth in net sales, over the same quarter of the previous year.

Citing strong growth in all its four business segments, ITC said that net sales added up to Rs.1468 crore for the quarter ended December 31, 2002, against Rs1308 crore for the quarter to December 31, 2001. Post tax profit for the latest quarter was Rs324 crore (Rs266 crore), while profit before tax was Rs506 crore (Rs427 crore).

Net income – including other income of Rs 34 crore (Rs22 crore) – was Rs1502 crore against Rs1330 crore4 for the same quarter of the previous financial year.

Total expenditure increased by 11 per cent to Rs928 crore in the third quarter, while interest cost (net) was halved to Rs7 crore. ITC said the expenditure increase was marginal considering the huge rollout efforts in new businesses like branded garments stores and the e-choupal initiative under agribusiness. At the same time, ITC continued efforts to reduce high-cost debt with low-cost funds.

Hotels showed the strongest revenue growth (36 per cent), followed by agribusiness (19 per cent), paperboards, paper & packaging (17 per cent) and FMCG (seven per cent).

ITC’s FMCG segment consists of cigarettes and smoking mixtures, and "others", meaning the new forays such as branded garments, greeting cards & gifts, packaged foods, and matches sourced from the small scale sector.

In profit growth also, the segments showed up in the same order.

In absolute terms, however, cigarettes accounted for 73 per cent of revenues (Rs2155 crore) and 91 per cent of profits (Rs467 crore). The FMCG sub-segment "others" showed a scorching revenue growth of 300 per cent (from Rs9 crore to Rs37 crore), although losses nearly doubled from Rs18 crore to Rs31 crore because of start-up costs.

ITC said the hotel industry witnessed a significant improvement during the quarter, with the ITC Maurya Sheraton in New Delhi and the ITC Grand Maratha Sheraton in Mumbai showing "impressive" occupancies and revenues during the period. These properties are owned by ITC, but are run by ITC Hotels.

ITC’s hotel business reported a profit of Rs5.65 crore (against a loss of Rs1.66 crore in the same quarter of the previous year), while revenues increased from Rs40 crore to Rs54 crore.

ITC’s spokesman clarified that the hotels results are not indicative of the overall business, since ITC itself owns only three or four properties and the rest are owned by subsidiary ITC Hotels Ltd.

Agribusiness fetched a profit of Rs9 crore on revenues of Rs397 crore, against a loss of Rs3 crore on revenues of Rs333 crore. Total agri-commodity exports touched Rs237 crore. ITC now has 1350 "e-choupals", its unique "click and mortar" initiative that links up one million farmers in 8000 villages over four states to the internet highway.

The paperboards, paper and packaging business fetched a profit of Rs64 crore (Rs40 crore) on revenues of Rs290 crore (Rs247 crore). The company said that the Bhadrachalam Paperboards Division and the Tribeni Tissues Division were integrated into the Paperboards and Specialty Papers Division during the quarter to realise strategic and operational synergies.