Kolkata– Cigarette-to-FMCG major ITC Ltd on Wednesday reported a close to 10 per cent increase in net profit to Rs 2,932.71 crore in the quarter ended on March 31, compared with Rs 2,669.47 crore in the year-ago period.

On a comparable basis, gross sales during the quarter stood at Rs 17,933.48 crore, representing a growth of 3.6 per cent, over Rs 17,315.75 crore in the corresponding period of 2016-17.

“Gross sales value excluding agri business grew by 5.7 per cent driven by FMCG others and hotels. Agri business growth was impacted on account of a high base (imported wheat trading), limited trading opportunities in agri commodities such as wheat, soya, coffee and lower leaf exports during the quarter,” the company said in a statement.

Revenue from cigarettes during the March quarter fell by almost 45 per cent to Rs 4,936.45 crore over Rs 8,954.94 crore in same period of previous fiscal. Its cigarette revenue during the year ended March 31, also decreased by 32 per cent to Rs 22,894.01 crore.

The company said the punitive and discriminatory taxation and the regulatory regime continues to exert severe pressure on the domestic legal cigarette industry even as illegal cigarette trade has been growing unabated.

“The legal cigarette industry, already reeling under the cumulative impact of a steep increase in taxation over the last five years and intense regulatory pressures, was further impacted by the sharp upward revision in GST Compensation Cess announced in July 2017,” the company said.

In the segment–FMCG-Others–its revenue rose to Rs 3,051.82 crore during the quarter as against Rs 2,885.76 crore in the corresponding period of previous year.

Despite the challenging conditions prevailing during the year, the company’s FMCG-Others businesses Segment Revenue at Rs 11,329 crore recorded an increase of 11.3 per cent (on a comparable basis) on a relatively firm base.

Its board of directors recommended a dividend of Rs 5.15 per ordinary share of Re 1 each for the financial year ended on March 31, 2018.

The company posted a standalone net profit of Rs 11,223.25 crore in 2017-18 (FY18), up by 10 per cent from Rs 10,200.90 crore in the previous financial year.

On a comparable basis, gross sales value (net of rebates/discounts) stood at Rs 67,081.92 crore in FY18, representing a growth of 4.5 per cent driven mainly by the branded packaged foods, personal care and the education and stationery products businesses offset by the decline in agri business revenue, the company said.

“Gross sales value and post-tax profit for the year up by 4.5 per cent and 10 per cent respectively, amidst a sharp slowdown in the economy, steep increase in tax incidence on cigarettes, subdued demand conditions in the FMCG industry, shortage of tobacco crop in Andhra Pradesh and lack of trading opportunities in the agri business,” it said in a statement.

On its revenue from hotels business, the company said the growth in segment revenue during the year was subdued at 5.6 per cent reflecting inter alia the overhang of excess room inventory and the impact of highway liquor ban.

“Improvement in room rates and operating leverage aided the faster growth of 26 per cent in segment results, notwithstanding the gestation costs of ITC Grand Bharat and the recently commissioned WelcomHotel Coimbatore,” it added. (IANS)