ITC Q1 net up 18% to Rs 1,891cr, sales miss expectations

Moneycontrol Bureau

Cigarettes to FMCG and hotels major ITC on Wednesday said its first quarter net profit rose 18 percent year-on-year to Rs 1,891 crore, in-line with street expectations. However, net sales rose lower-than-expected 10 percent year-on-year to Rs 7,339 crore. Analysts on average had expected the India's largest cigarettes maker to report a net profit of Rs 1,890 crore on revenue of Rs 7,800 crore, according to a CNBC-TV18 poll. Its EBITDA margin came in at 37.1 percent, higher than the 35.3 percent analysts had expected. ITC's other income in the April-June quarter was up 20 percent from a year ago to Rs 203 crore. Its net cigarette business sales gained 7 percent to Rs 3,537 crore in the quarter, while other FMCG net sales grew 18 percent to Rs 1,745 crore, it said. ITC's profits from cigarettes rose 18 percent to Rs 2,242 crore. However, other FMCG business, which had turned profitable in the Jan-March quarter, once again reported a loss. Other FMCG business losses were at Rs 19 crore in April-June, down 51 percent from a year ago. Among other segments, hotel business sales gained 8 percent to Rs 250 crore, while profits slumped 66 percent to Rs 9 crore. ITC's agri business sales rose 29 percent to Rs 2,189 crore and sales from paperboards, paper and packaging business were up 10 percent to Rs 1,163.14. Profits from agri business gained 16 percent to Rs 199 crore. But paperboards, paper and packaging business profit was down 5 percent to Rs 252 crore. "The results suggest cigarette volumes declined by 1-2 percent in the quarter. Other FMCG sales growth too was little slow compared to the previous quarter (Q4)," Sharekhan analyst Kaustubh Pawaskar told moneycontrol.com. The cigarette price hikes taken by the company will take some time to absorb in the market, he said, adding one could look at some volume growth only from the third quarter. At 12:30 hrs, ITC shares were down 3.6 percent to Rs 362.35 on NSE.