ITC standalone net profit falls 20 per cent in September quarter
The company reported a revenue increase of 45 per cent despite higher cigarette taxation impacting profitability.
ITC reported a 20 per cent year-on-year decline in standalone net profit to ₹4,137.1 crore for the September quarter, according to The Economic Times. This decline occurred even as revenue from operations rose by 45 per cent to ₹28,317.7 crore.
The company stated that an unprecedented rise in cigarette taxation affected its profitability. While ITC implemented price hikes in its cigarette business, it also took on some of the cost increases to maintain consumer demand and prevent sales from moving to illegal or tax-evaded products.
The cigarette segment saw revenue grow 78 per cent year-on-year to ₹15,536.1 crore. However, segment profit before interest and tax (PBIT) dropped 27 per cent to ₹3,813.5 crore due to higher taxes and the company's pricing strategy.
Non-cigarette FMCG revenue grew 16 per cent to ₹6,967.2 crore, with segment PBIT rising 28 per cent to ₹558.3 crore. The agri-business saw a 12 per cent revenue increase, while segment PBIT improved by 11 per cent.
In its earnings statement, ITC noted that the operating environment faced uncertainty from geopolitical tensions, trade disruptions, and elevated crude oil prices. The company also mentioned supply chain issues, higher freight costs, and inflationary pressures on food and energy.
ITC said that geopolitical developments, climatic conditions, and consumer sentiment will remain key monitorable factors, despite resilient demand in rural and urban markets.