ITC Ltd.'s net profit matched estimates in the March-ended quarter, while margins improved as expenses fell.
Net profit rose 10 percent to Rs 2,933 crore compared to the year-ago period, the hotels-to-cigarettes conglomerate said in its exchange filing. That's in line with the Rs 2,917 crore estimate of analysts tracked by Bloomberg.
Revenue fell 5 percent to Rs 10,586.5 crore, lower than the Rs 11,940 crore consensus estimate. The fall in revenue can partly be attributed to a 4.3 percent decline in cigarette sales - ITC’s largest segment, according to a note by brokerage firm Motilal Oswal. Cigarette volumes grew in low single digits, the note said.
Earnings before interest, tax, depreciation and amortisation rose 7 percent to Rs 4,144, while margins expanded to 39.1 percent from 34.8 percent. Raw material costs rose 3 percent, while total expenses fell.
The EBIT in cigarettes grew 7.5 percent to Rs 3,505 crore. ITC’s cigarette business contributes 87 percent to its total operating profit. Operating profit in the fast-moving consumer goods business excluding cigarettes grew 62 percent to Rs 91 crore. That was mainly due on the back of sales in its Sunfeast, Aashirvaad and B Natural brands.
ITC's shares rose 1.4 percent to Rs 285 after the announcement of the results. The stock has risen 7.2 percent in 2018 compared to a 4.5 percent rise in the benchmark S&P BSE Sensex Index.