ITC stocks surge, Q1 net profit rises to Rs 2,265 crore

MUMBAI: Shares of cigarettes-to-hotels major ITC were trading at day’s high and gained 2.63 per cemnt in intraday trade on Thursday after the company reported a net profit of Rs 2,265 crore for the quarter ended June 2015, up 3.6 per cent, as compared to a net profit of Rs 2,186 crore in the corresponding quarter last fiscal.

The margins rose to 39.8 per cent vs 35.5 per cent but sales were disappointing at Rs 8,505 crore, down 7.2 per cent, from Rs 9,164 crore, year-on-year.

The cigarette sales fell to Rs 4,149 crore, down 1.2 per cent, from Rs 4,201 crore, Year-on-Year (YoY).

Gaurang Shah, Geojit BNP Paribas Financial Services is of the view volume de-growth in tobacco is visible this time around as well. He is of the view that contribution from agri business is tad above expectations.

ITC reported other income of Rs 315 crore vs Rs 235 crore, YoY.

Non-cigarette FMCG sales at grew to Rs 2,171 crore, up 12.2 per cent, from Rs 1,935 crore, YoY.

Sanjay Manyal of ICICI Securities in an interview to ET Now said, de-growth in ITC’s topline due to cigarettes volume de-growth is worrisome. The company has to look at ways to boost volume and focus on non-cigarettes business to perk up sales.