ITC, the tobacco-to-FMCG-to-hospitality conglomerate, has maintained a healthy bottomline in a challenging environment with a 15.6% growth in net profit in the first quarter of 2014-15. It posted a net profit of Rs 2,186 crore from Rs 1,891 crore during the same period last year largely on the back of strong performance of tobacco, paperboard and agri-based business. The new FMCG business reduced losses from Rs 18.93 crore to Rs 12.09 crore in the first quarter.
However, the hotel business remained an underperformer and registered a loss of Rs 12 crore from a profit of Rs 9 crore in the year-ago period. The net revenue for the quarter grew by 25% to Rs 9,164 crore, driven by agri business and FMCG segment. The first quarter profit before tax increased by 18% to Rs 3,266 crore.
In a statement, ITC said the branded packaged foods businesses posted a healthy growth in revenues during the quarter, despite sluggish demand conditions and a marked deceleration in industry growth rate.
"In the staples, spices and ready-to-eat foods business, 'Aashirvaad' atta sustained its high-growth trajectory consolidating its leadership position across markets. In the bakery and confectionery foods business, the recently launched 'Sunfeast Farmlite' range of cookies in the health segment continues to garner increasing consumer franchise," ITC has said.
According to the company, during the quarter, the personal care products business has expanded its portfolio in the deodorant category with the addition of two new variants each for men and women, taking the total number of variants under the 'Engage' brand to 14. "Engage has garnered impressive market standing in a relatively short span of time and continues to gain traction in the market," ITC officials added.
Commenting on the hike in excise on tobacco, ITC said the steep increase in excise duty on cigarettes for the third year in succession as announced in the Union Budget 2014 along with further increase in value added tax (VAT) on cigarettes by some states during the quarter will exert further pressure on legal industry volumes and sub-optimize the revenue potential from the tobacco sector.