ITC Q2 beats street; cigarettes, FMCG sales boost PAT

ITC was trading flat after the company announced quarterly results yesterday.

ITC's second quarter net profit surged better than expected 21.5% year-on-year at Rs 1,514.31 crore, helped by strong sales, especially in cigarettes and other FMCG business. Lower losses in the other FMCG business also boosted overall earnings.

Analysts on average had expected a net profit of Rs 1,470 crore on revenue of Rs 5,945 crore, according to a CNBC-TV18 poll.

Overall operating margins for the company were at 35.28% in July-September, compared with 35.35% earlier.

ITC's total expenses during the quarter rose near 17% from a year ago at Rs 4,036.38 crore.

Results Analysis

The company is making significant investments in new technologies to cater to growing demand for value-added packaging among consumer electronics and FMCG companies.

While there was strong growth across most segments, net sales in ITC's hotels division rose just 1% at Rs 211.14 crore as second quarter is seasonally a weak quarter for the hotel industry. Hotel segment profit was up 9% at Rs 43.44 crore.

The continued economic turmoil in US and Europe, the two key source markets, and the slowdown in Indian economy also hurt the hospitality industry, the company said.

Also read what analysts say

ITC touched an intraday high of Rs 208.00 and an intraday low of Rs 206.05. At 12:27 hrs the share was quoting at Rs 207.25, up Rs 0.35, or 0.17%.
 
It was trading with volumes of 126,347 shares. In the previous trading session, the share closed up 1.60% or Rs 3.25 at Rs 206.90.