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ITC profit rises 21 pc in Q1 -- Excise hits cigarette volumes

Our Bureau

KOLKATA, July 20

CIGARETTE major ITC Ltd has posted a net profit of Rs 300.67 crore for the first quarter ended June 30, 2001, on a gross income of Rs 2,252.42 crore. This is up 21 per cent from the Rs 248.97-crore net (Rs 2,143.70 crore income) posted in the correspondi ng period of the previous year.

Net sales turnover stood at Rs 1,047.89 crore (Rs 1,005.99 crore), while total expenditure was Rs 551.55 crore (Rs 567.18 crore).

Though domestic trading conditions were depressed and the increase in excise duties on cigarettes caused volumes to decline, profits increased due to investments in brands and management of costs, the company said.

According to a press release, the company recently sold its entire stake in ITC Infotech, UK, a 100 per cent subsidiary, to ITC Infotech India Ltd, another subsidiary. This was consequent to the restructuring of ITC's information technology business. The Indian subsidiary also acquired the entire stake of ITC Infotech (US), which was a subsidiary of ITC Infotech, UK.

With the Tobacco Board declaring a crop holiday, there was no auction of FCV tobacco in Andhra Pradesh in the current season. The company, however, purchased tobacco in Andhra Pradesh well in excess of its requirements last year. It is now well stocked t o cater to the needs of the current year.

A two-month strike by workmen at a printing and packaging factory at Tiruvottiyur near Chennai ended in mid-May. The company's greetings card business has increased its reach to 368 locations.

The company's `e-Choupal' initiative in three commodities -- soya, coffee and aqua -- is being scaled up in Madhya Pradesh, Karnataka and Andhra Pradesh.

Meanwhile, the stock market responded cautiously to the results announcement. On the Calcutta Stock Exchange, the ITC counter slowed down after a good start during Friday's session; it fell to a low of Rs 778 from the day's high of Rs 795, before settlin g at around Rs 790.90.

In terms of turnover, however, ITC recorded a good show on CSE, recording 1.27 lakh shares, the third-highest after Satyam and Global Tele.

Mr Nilesh Dalmia of Dalmia Securities, referring to the Rs 100-crore-plus increase in gross income, said ITC has done well thanks to better quality control measures.

Mr K.P. Changoiwala of KPC Securities said that the company has to grapple hard with the excise regimen. Cigarettes are a volumes business, which could be sensitive to the prevailing duty structure, he added.