Surpassing market estimates, ITC reported a 17% jump in their net profit and earned mammoth Rs 3,090 crore in the last quarter (October-December) of FY17. ITC’s net profit for the same quarter in previous year stood at Rs 2,647 crore.
The last quarter of FY17 has seen a surge in the consumer demand and this is believed to be the prime reason for this impressive growth. This result also shows positive trends for the Indian economy since it has witnessed a mild crisis due to major structural reforms in the form of demonetization and GST (Goods and Service Tax) in the recent times.
ITC’s other FMCG segment also saw 16% surge in gross sales value. In terms of revenue, the segment reported a turnover of Rs 2,872 crore and profit before tax of Rs 47 crore. The segments which contributed for this growth are packaged food, lifestyle retailing, incense sticks and matches.
“The FMCG industry witnessed progressive recovery during the quarter from the transitional impact of GST rollout,” said ITC in a statement.
“Performance of lifestyle retailing business, however, remained impacted due to the ongoing restructuring of retail and trade footprint,” ITC’s statement added.
Although ITC’s many segments have performed well in the previous quarter, its cigarette business is facing some challenges. Due to revised GST compensation tax, the cigarette industry is overburdened with an additional tax of over 20%. Apart from increased tax, intense regulatory measures are somehow putting huge challenge before cigarette manufacturers. As far as business is concerned, ITC gained Rs 46.29 billion from their cigarettes business in the Q3 of the ongoing fiscal year which accounts for 46% of the overall sales.
Their hotel and agri-business also reported good profit during Q3 of the current financial year. ITC’s hotel business earned close to 55 crore net profit against total revenue of 404 crore. Agri-business reported 233 crore even after getting impacted by shortage of leaf tobacco in Andhra Pradesh.
On Friday, ITC’s stock price has closed at Rs 273.85 on the BSE; up by 0.37 per cent.
ITC’s Q3 Growth Increased by 17% with net Profit Surpasses Rs 30 Billion
