ITC Q2 net jumps 36.2% to Rs 4,023 cr

FMCG-to-hotel-to-tobacco major ITC has witnessed a 36.2% jump in net profit in the second quarter of this fiscal from Rs 2,954 crore to Rs 4,023 crore largely due to its participation in ‘Make in India’ campaign and accelerated depreciation and benefit from reduced corporate tax burden.

Gross revenue for the quarter stood at Rs11,750 crore, representing a growth of 6%, driven mainly by paperboards, hotels and FMCG-others (excluding the lifestyle retailing business) segments.

According to ITC, the new FMCG segment delivered a resilient performance during the quarter which witnessed a further slowdown in consumption both in urban and rural markets. The segment revenue grew by 6.5% on a comparable basis led by atta, potato chips and premium cream biscuits in the branded packaged foods businesses, liquids (handwash & bodywash) in the personal care products business and notebooks in the education and stationery products business.

The company has also stated that the hospitality business recorded a healthy growth in segment revenue and segment EBITDA during the quarter driven by robust performance of recently commissioned hotels. “Segment results include the impact of additional depreciation pertaining to new properties. Sluggish demand environment contributed to relatively muted performance of the other properties,” the company has said.

Commenting on tobacco segment, ITC has stated that tax incidence on cigarettes increased by over 20% in 2017-18, representing the combined impact of transition to GST and increase in excise duty announced in the Union Budget 2017. “While stability in taxes since the introduction of GST in July 2017 has provided some relief to the legal cigarette industry, it is pertinent to note that the legal cigarette industry volumes remain significantly below June 2014 levels. Moderation in taxes is critical for addressing the interests of all the stakeholders of this industry, including the tobacco farmers, the exchequer and the consumers,” it added.

Meanwhile, ITC has been ranked no.1 globally among peers (comprising companies with market capitalisation between $38 bn and $51 bn) and overall #3 globally on ESG performance in the food products industry by sustainalytics – a renowned global ESG ratings company.

Source:- https://retail.economictimes.indiatimes.com/news/food-entertainment/personal-care-pet-supplies-liquor/itc-q2-net-jumps-36-2-to-rs-4023-cr/71749881