Despite a challenging operating environment, FMCG major ITC on Thursday reported that its net profit for the first quarter ended June 30, 2016 grew by 10.1 per cent at Rs 2,385 crore from the same period a year ago as revenue share from the cigarette business declined.
In Q1 FY 2015-16, the cigarette-to-hotels major had posted a net profit of Rs 2,166 crore, ITC said in a filing to the Bombay Stock Exchange (BSE).
The net revenue of the company increased 8.61 per cent at Rs 13,673.58 crore in Q1 FY 2016-17 from Rs 12,589.14 crore in the same period a year ago.
Commenting on Q1 earnings, the company said that it delivered steady performance during the quarter despite a challenging operating environment marked by continuing pressure on legal Cigarette industry volumes and persistently sluggish demand conditions prevailing in the FMCG industry.
Operating conditions in the Hotels and Paperboards, Paper and Packaging segment also remained subdued, it said in the filing to BSE.
The performance of the Cigarette business during the quarter remained subdued on account of continued pressure on the legal Cigarette industry in India. The revenue share from the cigarette business rose 6.4 per cent in the quarter to Rs 8,231 crore from Rs 7,733 crore in the corresponding quarter of the last financial year.
Revenue from FMCG other segment grew by 9.5 per cent at Rs 2,385.15 crore during the quarter against Rs 2,177.50 crore amidst weak demand conditions and a price deflationary scenario particularly in the Personal Care business.