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ITC posts 23% growth in net

Jan 25, 2000

ITC Limited, has posted a 23% growth in net profits on the back of a sharp rise in operating margins and a decline in interest expenditure. ITC operates in five principal areas of tobacco and cigarettes (market share 66%), hotels, paper and packaging, and international trading. It is the industry leader in its core business of cigarette manufacturing and tobacco leaf procurement, processing and exports in India. The product portfolio includes popular brands like Wills, Gold Flake, India Kings and Classic.

(Rs m) 3QFY2000 3QFY1999 Change
Net Sales 9,608.0 8,376.0 14.7%
Ther Income 218.0 232.0  
Interest 266.0 391.0 -32.0%
Depreciation 314.0 261.0 20.3%
Profit before Tax 2,834.0 2,080.0 36.3%
Tax 1,162.0 723.0 60.7%
Profit after Tax/(Loss) 1,672.0 1,357.0 23.2%
Net profit margin (%) 17.4% 16.2%  

ITC has posted a rise in net sales mainly due to a 2.5% rise in sales volumes. The other factors contributing to a healthy growth in operating profits were cost control, improved productivity and improved product mix. The company is expected to benefit further as the economy gains momentum and income levels rise.

The quality of earnings has improved and this is evident from the rise in profits despite a decline in other income. The company's profitability has however been suppressed on account of higher provisions for taxes in view of the pending legislation in several high courts.

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