Kolkata July 26 (IANS) Cigarette-to-FMCG major ITC Ltd on Thursday reported a 10.08 per cent increase in its net profit to Rs 2 818.68 crore in the quarter ended on June 30 as compared to Rs 2 560.50 crore in the year-ago period.
On a comparable basis its gross revenue from sale of products and services was at Rs 10 722.22 crore in the June quarter down by about 22 per cent from Rs 13 722.21 crore in the corresponding period last year.
However gross sales (net of rebates and discounts) on a comparable basis grew by 13.5 per cent to Rs 18 171.66 crore for the quarter under review from Rs 16 010.66 crore in the corresponding period of the previous year.
The company s overall expense during the quarter decreased by over 32 per cent to Rs 6 978.5 crore as compared to Rs 10 332.61 crore in the corresponding period last year and the excise duty paid also fell drastically to Rs 167.56 crore from Rs 3 845.76 crore in the year-ago period.
The company said steep escalation in tax incidence under GST regime continues to weigh on FMCG-cigarettes performance.
The legal cigarette industry already reeling under the cumulative impact of steep increase in taxation over the last five years and intense regulatory pressures was further impacted by a sharp increase of 13 per cent in tax incidence on cigarettes (19 per cent increase for the king-size filter segment) under the GST regime a company statement said.
"Coupled with the increase in excise duty rates announced in the Union Budget 2017 this resulted in an incremental tax burden of over 20 per cent on the Cigarette business post implementation of GST " it said.
Revenue from cigarettes during the June quarter fell by almost 42 per cent to Rs 5 127.59 crore from Rs 8 774.16 crore in same period of previous fiscal according to the regulatory filing.
In the FMCG -others segment which includes branded packaged foods businesses apparel personal care products agarbattis and others the revenue grew by 14.3 per cent during the quarter.
"This was led by staples snacks and meals business in the branded packaged foods business deodorants and liquids in the personal care products business classmate notebooks and agarbattis offset by the ongoing restructuring of retail footprint and trade presence in the lifestyle retailing business " the statement said.
Its agri-business posted a segment revenue of Rs 3 151.27 crore in the quarter under review up by 14.15 per cent from Rs 2 760.52 crore in the same period last year according to filing.
"The (agri) business leveraged market opportunities in oilseeds rice spices and coffee resulting in robust growth in revenue during the quarter. However pressure on legal cigarette industry volumes adverse quality and leaf cost escalation pertaining to Andhra 2017 crop and lower export incentives weighed on segment results " the company said.
The business continues to step up initiatives in the area of value added agriculture to create new vectors of growth by leveraging its agri-commodity sourcing and processing expertise and distribution network of the company.
"These include the launch of packaged prawns super safe spices fresh fruits and vegetables and dehydrated onions under the ITC MasterChef and Farmland brands. Plans are afoot to rapidly scale up these interventions in the ensuing months " it said.
The hotels segment recorded healthy growth in revenue and profit driven by higher room rates strong food & beverage sales and high operating leverage.
The company commissioned ITC Kohenur a 271 room luxury property at Hyderabad on June 1 2018.
However in terms of paperboards paper and packaging business the segment results registered growth driven by strategic investments in imported pulp substitution process innovation leading to improved pulp yield benefits of a cost-competitive fibre chain product mix enrichment and higher realisation.
"While there was some improvement in the order book position during the quarter segment revenue remained muted due to slow pick-up in demand in end user industries and unabsorbed capacity in the domestic industry " it said.
The company said capacity utilisation was also scaled up at the recently commissioned machine at the Tribeni unit.
Rebuild of a paperboard machine at the Bhadrachalam unit is nearing completion likely to be commissioned in the ensuing quarter it added.

--IANS bdc/vd