ITC closed the second quarter with a 36% rise in its standalone post-tax profit to ₹4,023.1 crore. Operational revenue rose to ₹11,871.5 crore from the ₹11,502.8 crore a year ago.
Its FMCG-Others segment revenue rose by about 6.5% on a comparable basis amidst slowdown in the FMCG industry in urban and rural markets.
An ITC statement said that the operating environment challenges also included a crunch in market liquidity and disruptions due to floods in several parts of the country. The revenue rise was driven mainly by paperboard, hotels and FMCG-Others.
The cigarette business continued to be under pressure. The company also mentioned that it has exercised the option permitted under relevant tax laws to get benefits under the government’s ‘Make in India’ initiative.
Accordingly, the deferred tax liabilities (net) as at March 2019, arising mainly on account of ITC’s continued focus on MII investments across sectors and the estimate of tax expense for the year ending March 31, 2020, have been re-measured.
Consequently, tax expense for the current quarter and six months ended September 30, 2019 include a ₹340-crore credit.
ITC’s official spokesman said the conglomerate’s progressive investment in India topped ₹14,000 crore, mainly in the food processing and the hotels sectors.
The hotels business delivered ‘good’ results in its top and bottom line in the recently commissioned hotels. Performance was muted in other properties, amid sluggish demand environment.
Abneesh Roy, research analyst and executive VP, institutional equity research, Edelweiss Securities, said sales were in line with estimates while post-tax profit was ahead of estimates on account of tax reversal.
