ITC Q4 net profit rises 5.67% to Rs 2,495 crore

Diversified group ITC Ltd on Friday reported a 5.67 per cent increase in standalone net profit at Rs 2,495.20 crore (Rs 24.95 billion) for the fourth quarter ended March 31, amid sluggish demand environment.

The Kolkata-based company, which has announced plans to issue one bonus share for every two existing ordinary shares, had posted a net profit of Rs 2,361.18 crore (Rs 23.61 billion) during the corresponding January-March quarter a year ago.

Net sales were up 9.51 per cent at Rs 10,062.38 crore (Rs 100.62 billion) for the quarter under review as against Rs 9,188.25 crore (Rs 91.88 billion) in the previous fiscal, ITC said in a Bombay Stock Exchange filing.

There was 'improvement in performance during the quarter driven by improved realisations, margin expansion, benign input costs and favourable base effect' the company said.

It, however, said revenue growth of non-cigarette FMCG segment was impacted because of persistently sluggish demand environment, price deflationary scenario and trade pipeline synchronisation in the notebooks category.

Growth in segment results driven by higher scale and gross margin expansion, it said.

Revenue from the total FMCG business, including cigarettes increased 8.35 per cent to Rs 7,343.29 crore (Rs 73.43 billion) from Rs 6,777.21 crore (Rs 67.77 billion) in the corresponding quarter of 2014-15.

During the quarter, revenue from cigarettes increased 10.17 per cent to Rs 4,639.17 crore (Rs 46.39 billion) from Rs 4,210.70 crore (Rs 42.1 billion) in the year-ago period although it continued to be impacted by illegal trade.

Revenue from FMCG-Others segment was up 5.36 per cent to Rs 2,704.12 crore (Rs 27.04 billion) during January-March period as against Rs 2,566.51 crore (Rs 25.66 billion) last fiscal.

For FY16, ITC net profit on consolidated basis was up 2.57 per cent to Rs 9,911.61 crore (Rs 99.11 billion) as against Rs 9,663.17 crore (Rs 96.63 billion) in the previous fiscal.

Consolidated net sales were up 1.64 per cent to Rs 39,066.85 crore (Rs 390.66 billion) in 2015-16 as against Rs 38,433.31 crore (Rs 384.33 billion) in 2014-15.

In FY16, ITC consolidated revenue from cigarettes segment increased 5.17 per cent to Rs 18,685.98 crore (Rs 186.85 billion) from Rs 17,765.99 crore (Rs 177.65 billion) of FY 2014-15 although it continued to be impacted from illegal trade.

"FMCG-Cigarettes segment continues to be impacted by severe pressure on legal cigarette industry volumes even as illegal trade grows unabated," said ITC.

Yearly revenue from the non-cigarette FMCG segment in the fiscal was up 7.71 per cent to Rs 9,723.85 crore (Rs 97.23 billion) period as against Rs 9,027.23 crore (Rs 90.27 billion) of FY 2014-15 as ITC's most categories recorded improvement in market standing amid sluggish demand and price deflationary environment.

"FMCG-Others segment revenue growth was impacted because of persistently sluggish demand environment, price deflationary scenario and trade pipeline synchronisation in the notebooks category. Growth in Segment Results driven by higher scale and gross margin expansion," said ITC.

In FY16, consolidated revenue from hotel business was up 8.18 per cent to Rs 1,358.92 crore (Rs 13.58 billion) compared with Rs 1,256.16 crore (Rs 12.56 billion) in the same period last year aided by healthy growth in occupancy and Food & Beverage revenue, it added.

ITC's revenue from agri business segment was down 11.02 per cent to Rs 7,456.88 crore (Rs 74.56 billion) in FY 2015-16 from Rs 8,380.47 crore (Rs 83.8 billion) in the last year impacted by lack of trading opportunities in wheat, coffee and soya due to higher crop output and steeper currency depreciation in competing origins.

Revenue from paperboards, paper and packaging business was up marginally 0.87 per cent at Rs 5,017.39 crore (Rs 50.17 billion), compared with Rs 4,973.90 crore (Rs 49.73 billion) in the same period last year.

ITC further informed that its board has recommend a total dividend of Rs 8.50 per share including a special Dividend of Rs 2.00 per share for FY16.

It has also recommended for issuance of one bonus share for every two existing ordinary shares held by Members on record date.

"Board of Directors recommend to shareholders for their approval of total Dividend of Rs 8.50 per share including a special Dividend of Rs 2.00 per share for FY16 and issuance of one bonus share for every two existing ordinary shares held by Members on record date," said ITC in a statement.

Image: ITC has diversified its portfolio in order to stay afloat in tough times. Photograph: Rupak De Chowdhury/Reuters