ITC Q2 net profit up 6.11% to Rs 4,956 crore

Diversified entity ITC reported a 6.11% rise in consolidated net profit to Rs 4,955.90 crore for the September quarter amid a challenging operating environment.

The company had posted a consolidated net profit of Rs 4,670.32 crore in the year-ago period, ITC said in a regulatory filing.

Its gross revenue from the sale of products stood at Rs 19,137.51 crore, up 3.83% during the quarter from Rs 18,430.52 crore a year ago.

ITC's revenue from operations rose 3.55% to Rs 19,270.02 crore in the second quarter of the current fiscal, as against Rs 18,608 crore last year.

"Amidst a challenging operating environment and high base effect in some of its operating segments, the company sustained its strong growth momentum during the quarter, driven by focus on customer centricity, accelerated digital adoption, execution excellence and agility," ITC said in its earning statement.

The company's total expenses in the quarter rose 3.54% to Rs 13,278.69 crore.

The company said strong performance continued in the FMCG-others category with the segment revenue up 8.3% year-on-year (y-o-y) on a high base.

The cigarettes segment also showed a resilient performance and net segment revenue was up 8.5% year-on-year.

There was sustained volume clawback from illicit trade on the back of deterrent actions by enforcement agencies and relative stability in taxes, it added.

Hotels business saw a "stellar performance" with a record high second quarter, ITC said.

The agribusiness segment revenue, excluding wheat and rice exports, grew 26.4 per cent y-o-y.

Geopolitical tensions and climate emergencies have led to concerns over food security and food inflation globally.

"To ensure India remains food secure, the government has had to impose trade restrictions on agri commodities; consequently limiting business opportunities for the agribusiness," the company said.

The performance in the paperboards, paper and packaging segment reflects the impact of low-priced Chinese supplies and muted demand in export markets, sharp reduction in global pulp prices and high-base effect, it said, adding that the domestic demand was also relatively subdued in certain discretionary categories.

During the quarter, public investment remained strong, and consumption demand has been relatively subdued, especially in the value segment and rural markets on the back of sub-par monsoon and persistent food inflation, which saw a sharp spike, ITC said.

"Green shoots of recovery are visible, with prospects of improved agri output, the onset of the festive season, increase in rural wages and government spending on infrastructure auguring well for a recovery in rural markets," it said.

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