Tobacco and hospitality industries major ITC Ltd on Friday reported a 20.2 per cent rise in net profits for the first quarter of 2007-08 driven by higher cigarette prices and continuing growth in the consumer, hotels and agri-businesses.
ITC's net profit rose to Rs 7.83 billion ($193 million) for the quarter ended on June 30, from Rs 6.52 billion in the like period of the previous year.
The gross turnover of the year grew by 20.2 per cent to Rs 195.05 billion while the net turnover was Rs 123.69 billion, the Kolkata-headquartered company's chairman YC Deveswar told the 96th annual general meeting here.
A value-added tax of 12.5 per cent imposed on cigarettes from April pushed up prices. Accordingly, ITC, whose 31.7-per cent stake is owned by British American Tobacco Plc, raised cigarette prices by about 20 per cent.
In the past years, ITC had diversified into products such as garments, greeting cards and incense to reduce its dependence on tobacco. It also entered areas like personal care, apparel, retail and snack food sectors.
The non-cigarette portfolio of ITC grew by 37.6 per cent during the year and now accounts for 52.3 per cent of the company's net turnover.
Pre-tax profit jumped 20.1 per cent to Rs 39.27 billion while post-tax profit at Rs 27 billion, registered a growth of 20.8 per cent.
Earnings per share for the year stands at Rs 7.19 while the cash flows from operations stood at Rs 34.02 billion during the year.
ITC shares, valued at $15.6 billion, gained 3 per cent in the quarter, trailing a 12 per cent rise in the main index and a 5 per cent rise in the sector index.
"The ITC Group's contribution to foreign exchange earnings over the last 10 years amounted to nearly $2.8 billion, of which agri exports constituted nearly 65 per cent," Deveswar said.
"Earnings from agri exports is an indicator of the company's contribution to the rural economy by effectively linking small farmers with international markets."