ITC topline dips in first quarter

FMCG major ITC suffered a drop in its topline during the first quarter of the current fiscal reporting a net sales of Rs.8,505.5 crore against Rs,9,184.4 in the same quarter of 2014-15. The net profit has increased by 3.6 per cent to Rs.2,265.4 crore from Rs.2,188.40 crore during this period.

Admitting that performance during the quarter was subdued, ITC said in a release the company attributed this performance to the “unprecedented pressure on legal cigarette industry volumes, sluggish demand conditions in the FMCG industry and lack of trading opportunities in wheat and soya.”

Although best known for its cigarettes business (which accounts for about 50 per cent of its revenues), ITC has multiple businesses which include foods, garments (other-FMCGs), hotels, paper and packaging and agri-business.

The segment, excluding cigarettes, posted a 12.2 per cent revenue growth, even as sales of ITC’s instant noodles (under its staples, snacks and meals business), were impacted by regulatory issues in the later part of the quarter.

Hotels registered a 15.7 per cent growth driven by better room occupancies and food and beverage revenues. The company said that agri-business was affected due to lack of export opportunities as export of Indian wheat was impacted by lower international prices and poor quality due to unseasonal rains.

The overall slowdown in the FMCG and cigarette industry affected ITC’s paper business with cheap imports.