Diversified conglomerate ITC Ltd disappointed markets with net profit rising by a mere 0.25 per cent at Rs 2,431 crore for the July to September quarter this fiscal. It stood at Rs 2,425 crore in the corresponding period last fiscal.
Profit remained flat mainly on account of an over one per cent drop in net sales to the tune of Rs 8,805 crore (approximately) for the period under review. Sales in the corresponding quarter last year stood at Rs 8,930 crore.
The net sales took a beating mainly on account of a fall in revenues from agri-business (10.5 per cent dip) and paper boards, paper and packaging segments (2.3 per cent). Accordingly, profit (before tax) for the two segments also saw a drop.
According to a statement issued by ITC, segment revenue during the quarter was impacted by the lack of export opportunities in wheat, coffee and soya.
“While export of Indian wheat was adversely impacted by lower international prices and poor quality due to unseasonal rains, soya and coffee trading opportunities were constrained due to adverse price parity in view of higher crop output and sharp currency depreciation in competing origins,” it said.
The Paper boards, Paper & Packaging segment continued to be impacted by the slowdown in the FMCG and Cigarette industry.
“Reduction of import duties under various Free Trade Agreements, especially with ASEAN which became effective from 1st January 2014, also weighed on the performance of the domestic Paper and Paperboard industry. Cheap imports from China also adversely impacted the domestic industry. Consequently, Segment Revenue and profit remained subdued during the quarter,” the statement said.
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