Q2 Results: ITC Posts Highest-Ever Quarterly Profit On Lower Tax Expense
ITC’s net profit rose 36.2 percent year-on-year to Rs 4,023.1 crore in the quarter ended September.
ITC Ltd. reported its highest ever quarterly profit as tax expenses fell and other income rose.
Net profit rose 36.2 percent year-on-year to Rs 4,023.1 crore in the quarter ended September, the cigarette-to-hotels conglomerate said in an exchange filing. That compares with the Rs 3,642-crore consensus estimate of analysts tracked by Bloomberg.
Its revenue rose 5.3 percent over the last year to Rs 11,871.5 crore—in line with the Rs 11,910-crore estimate.
ITC, in the filing, said it opted for the lower corporate tax rate announced by Finance Minister Nirmala Sitharaman last month. The company’s total tax expenses fell by nearly half over the year-ago period to Rs 784.60 crore.
Its operating income, or earnings before interest, tax, depreciation and amortisation, rose 8.5 percent year-on-year to Rs 4,562 crore—against the Rs 4,602-crore forecast. Operating margin expanded 110 basis points to 38.4 percent in the second quarter.
This comes at a time volume growth eased for fast-moving consumer goods firms as Indians are spending less on biscuits and spices to shampoos and toilet soaps, indicating a slowdown in the economy that expanded at its slowest pace in six years.
The operating environment was rendered particularly challenging during the quarter with further deceleration in economic activity accentuated by a drop in consumption, especially in rural areas, severe crunch in market liquidity conditions and disruptions, floods in several parts of the country. Record rainfall, albeit with significant spatial variations, and schemes to boost farmer income are expected to support consumption demand going forward.ITC’s media statement
Volume growth of rival Hindustan Unilever Ltd.—India’s largest FMCG company—remained flat at 5 percent during the July-September period.
Other Highlights:
- Other income rose 30 percent to Rs 654.3 crore.
- Cigarettes segment revenue up 6 percent to Rs 5,326.8 crore.
- Other FMCG segment revenue rose 4 percent to Rs 3,288.3 crore.
- Hotel business segment revenue up 18 percent to Rs 426.6 crore
- Agri business segment revenue up 19 percent to Rs 2,647.5 crore.
- Paper segment revenue rose 10 percent to Rs 1,565.4 crore.
Shares of ITC fell 0.8 percent ahead of the earnings announcement compared with a flat Nifty 50 Index.
