Fast-moving consumer goods (FMCG) major ITC reported a 12% year-on-year rise in net profit at ₹2,954.67 crore for the quarter ended September 30, 2018 driven by robust growth across business verticals including tobacco, consumer goods, agri-products, and hotels.
The earnings were in line with Street estimates. A Bloomberg poll of analysts had pegged the company's net profit for the second quarter of fiscal 2018-19 at ₹2,879 crore.
The tobacco-to-hospitality conglomerate's revenue from operations grew over 15% year-on-year to ₹11,272.51 crore. The company's operating income, or earnings before interest, tax, depreciation, and amortisation (Ebitda) rose close to 12% year-on-year to ₹4,206 crore.
Revenue from the sale of cigarettes during the quarter under review rose 10% year-on-year to ₹5,026.06 crore.
The company reported a healthy performance during the quarter despite a challenging business environment, and continuing pressure on the legal cigarette industry, it said in a regulatory filing. Analysts estimate ITC to have benefited from volume growth, much like many other consumer goods companies that have reported earnings for the July-September period over the last few days.
“This positive surprise in volumes is likely, given that most of the consumer names have delivered strongly on volumes in the September quarter (HUL saw volume growth of 10% year-on-year; Asian paints at 11% year-on-year),” said Abneesh Roy, senior VP at Edelweiss Securities, in a research report.
Net revenue of ITC’s hotel business grew 20.8%, while the agri-products business saw a 12.8% growth year-on-year. Improved operating profit from the hotels business, which was up 35% over the same period last fiscal, on account of higher room rates, strong food and beverages sales, and high operating leverage, also helped the company's overall financial performance.