ITC beats street with Q3 net profit of Rs 2,052 cr, up 21%

Cigarettes major ITC reported a better-than-expected 21 percent year-on-year rise in third quarter net profit at Rs 2,052 crore, helped by strong growth in FMCG and agri businesses.Its net sales growth of 23 percent at Rs 7,627 crore also topped street estimates.Analysts on average had expected ITC to report a net profit of Rs 2,007 crore on revenue of Rs 7,220 crore, according to a CNBC-TV18 poll."Overall ITC's results were good...Excellent performance of the non-cigarette FMCG business, good growth in the agri-business is driving growth," said Kaustubh Pawaskar of brokerage Sharekhan. The company saw its cigarette revenue rise 13 percent to Rs 3,657 crore, helped by the price hikes that it took. The analyst expects ITCs cigarette volumes would have grown around 1 percent in the quarter. The 64 mm cigarette that the company is test marketing currently should start contributing to its volumes couple of years down the line, he feels. Its other FMCG sales, which include biscuits and crisps, and soaps and shampoos, surged 30 percent to Rs 1,783 crore. ITC's losses in the non-cigarette FMCG business also came down to Rs 24 crore from Rs 47 crore. The agri business also continues to report strong growth. Net sales jumped 61 percent to Rs 1,831 crore and paperboards, paper and packaging saw sales rise 2.5 percent to Rs 1,002 crore. Paper and packaging margins at around 20 percent were below expectations, mainly on the back of rising wood pulp prices and deteriorating sales mix, another analyst said. ITC's hotels business, however, remains slow, amid the overall slowdown in the industry. Hotel business sales rose 11 percent to Rs 309 crore, but profit slumped 46 percent to Rs 55 crore. ITC shares were up about 1 percent at Rs 288.05 on NSE in afternoon trade. Sharekhan currently has a "buy" rating on the stock.Source: Moneycontrol

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