ITC Ltd. closed the third quarter with a 16.8% rise in its net profit at ₹3,090.2 crore on the back of a 16% rise in revenue from its ‘FMCG-Others’ segment. Profit in the hotels segment too rose even as profits in the cigarette segment dipped ₹22 crore from ₹3,291 crore a year earlier.
Volumes in the legal cigarette industry are under pressure due to a sharp increase in tax under the GST regime, the firm said in a release. ITC’s operational revenue stood at ₹9,952.2 crore in the quarter against ₹9,763.9 crore a year earlier.
While the FMCG industry witnessed progressive recovery in the quarter from the transitional impact of the GST rollout, overall demand remained subdued. The firm said due to restructuring of indirect taxes, gross revenue from sale of products and services for the quarter were not comparable with previous periods. Profit in the paperboards, paper and packaging segment rose 9% on higher volumes and import substitution.
Impact on agriculture
ITC’s agri business continued to be impacted by reduced crop in Andhra Pradesh due to drought in 2016, which has also affected crop quality.
Third quarter results contrast with the 5.7% rise in net profit a year earlier when demonetisation had led to lower consumer offtake and reduction of trade pipelines due to the cash crunch.
