ITC’s recent report revealed that the company has been performing extremely well and its net profit has taken a jump of 10 per cent. The report also stated that this fiscal first quarter, ITC’s revenue has also increased by 8.3 per cent.
Though the company has not revealed the details and specifics that resulted the hike in profit, but business analysts feel that volume growth in cigarettes after almost 12 quarters and robust agribusiness performance have triggered the profit figures. The cigarettes-to-hotels group posted a net profit of Rs 2,384.7 crore for the April-June quarter on revenue of Rs 13,253.1 crore.
Commenting in its earning statement, company stated that The steady performance was achieved despite continuing pressure on legal cigarette industry volumes, sluggish demand in the FMCG industry, and subdued operating conditions in the hotels, paperboards, paper and packaging businesses.
Cigarette volume growth during the quarter was more than what was estimated. While the results were declared aftermarket hours, ITC's shares closed nearly flat at Rs 250.65 on the Bombay Stock Exchange (BSE) on Thursday, adds analyst.
Adding further to the information, Edelweiss Financial Services Ltd. said that ITC's cigarette sales volume in the quarter went up 3-4 per cent year-on-year as compared to an initial estimate of 2 per cent. ITC, which accounts for three out of four cigarettes sold legally in the country, however said its business in this segment remained subdued. The segment reported 6.4 per cent growth in sales at Rs 8,230.6 crore, while gross profit improved 8 per cent to Rs 3,004.6 crore.