ITC Q3 net jumps 21.4% at Rs 1,389 cr
Multi- business conglomerate ITC on Friday reported a 21.4% jump in net profit for the quarter-ended December, exceeding market expectations.
By ET Bureau |
KOLKATA/MUMBAI: Multi- business conglomerate ITC on Friday reported a 21.4% jump in net profit for the quarter-ended December, exceeding market expectations. The company said net profit rose to 1,389.08 crore on the back of strong cigarette sales, a reduced loss in non-tobacco consumer goods business and an increase in non-operating income.
Net sales for the quarter rose 18.56% to 5,453.49 crore, largely in line with market estimates.
"Growth was multi-dimensional across all businesses," ITC spokesman Nazeeb Arif said without commenting on the company's future strategy.
Analysts said the future looked bright for ITC. The company will expand its product portfolio under each brand to maximise future returns, a Kolkata-based analyst said on condition of anonymity.
Between October and December 2010, ITC's cigarette business launched at least two new products, Lucky Strike and Gold Flake SLK; the foods unit launched Sunfeast Yippee Noodle and Dark Fantasy Choco; and the fast-moving consumer goods (FMCG) division launched Vivel glycerine milk cream and stationery products under the Classmate brand.
Shares of the company, however, lost 1.63 % to close the day at 168.95 on the Bombay Stock Exchange. The exchange's benchmark index, the Sensex, slipped a marginal 0.2%. Most stock traders attributed the fall in ITC shares to weak market sentiment.
But Abhijeet Kundu, vice-president at Antique Stock Broking, had a different take. Kundu said ITC's third quarter performance was below expectations. He said a plant closure for almost a month had an impact on its margins. After the slow growth in the first two quarters of the year, there has been consistent improvement in volume growth. This will continue further, according to Kundu. "There is still a concern on the possible duty hike in the budget, although ITC has been passing on the cost to consumers without hurting the demand," he said.
Except for the paper business, all other business segments of the company posted double-digit growth in revenues. The company's operating profit margin climbed at a modest rate of 70 basis points to 31%. Pre-tax profit during the period was up 19.4% to 2,031.27 crore. Pre-tax profit during the period was up 19.4 % to 2,031.27 crore.
Net sales for the quarter rose 18.56% to 5,453.49 crore, largely in line with market estimates.
"Growth was multi-dimensional across all businesses," ITC spokesman Nazeeb Arif said without commenting on the company's future strategy.
Analysts said the future looked bright for ITC. The company will expand its product portfolio under each brand to maximise future returns, a Kolkata-based analyst said on condition of anonymity.
Between October and December 2010, ITC's cigarette business launched at least two new products, Lucky Strike and Gold Flake SLK; the foods unit launched Sunfeast Yippee Noodle and Dark Fantasy Choco; and the fast-moving consumer goods (FMCG) division launched Vivel glycerine milk cream and stationery products under the Classmate brand.
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Shares of the company, however, lost 1.63 % to close the day at 168.95 on the Bombay Stock Exchange. The exchange's benchmark index, the Sensex, slipped a marginal 0.2%. Most stock traders attributed the fall in ITC shares to weak market sentiment.
But Abhijeet Kundu, vice-president at Antique Stock Broking, had a different take. Kundu said ITC's third quarter performance was below expectations. He said a plant closure for almost a month had an impact on its margins. After the slow growth in the first two quarters of the year, there has been consistent improvement in volume growth. This will continue further, according to Kundu. "There is still a concern on the possible duty hike in the budget, although ITC has been passing on the cost to consumers without hurting the demand," he said.
Except for the paper business, all other business segments of the company posted double-digit growth in revenues. The company's operating profit margin climbed at a modest rate of 70 basis points to 31%. Pre-tax profit during the period was up 19.4% to 2,031.27 crore. Pre-tax profit during the period was up 19.4 % to 2,031.27 crore.
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