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ITC posts 10 percent profit growth

As a percentage of topline, the cigarette company paid a slightly lower rate amount of excise

Samar Srivastava
Published: Jul 21, 2016 07:00:20 PM IST
Updated: Jul 21, 2016 07:41:23 PM IST
ITC posts 10 percent profit growth
Image: Shutterstock

India’s largest cigarette maker reported a 10 percent increase in net profit to Rs2385 crore in the quarter ended June 30, 2016 as the company paid a slightly lesser amount as excise duty.
 
ITC whose stock has been under an overhang for several months on account of higher taxes has shown itself resilient to the effect of higher taxes. Excise duty as a percentage of sales fell from 25 percent in the quarter ended June 30, 2015 to 24 percent in the quarter ended June 30, 2016.
 
ITC, which also has a substantial consumer goods business saw its top line rise 8 percent to Rs13,156 crore in the same period. So far only Hindustan Unilever, the country’s largest consumer goods company has announced numbers. It disappointed markets and reported a 4 percent volume growth number sending its stock down 5 percent in 2 days to Rs 890. The stock has since recovered to Rs910. Most analysts have a hold on the HUL stock.
 
ITC's results also come at a time when the onset of a strong monsoon has seen the markets accord greater growth prospects to consumer stocks. As a result, the stock is up 15 percent YTD to Rs250. The results were announced after market close.

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