Tobacco.org

Cigarette biz, belt-tightening boost show 

Beating market expectations for the second consecutive quarter, ITC has logged a strong performance, thanks to its diversified business portfolio. The tobacco-to-FMCG major has registered a double-digit increase in net profit and revenues as well as a healthy expansion in profit margins.

Though the company is witnessing a subdued performance in its hotel business and its non-cigarette FMCG continues to bleed, the good show put up by its other businesses has more than compensated for any adverse impact on profits.

ITC has made significant savings on advertising & promotional costs, as is evident from the y-o-y drop in company’s other expenditure. It also made small savings on raw material costs. All this helped the operating profit margin to expand by more than 500 bps to 36.5%, while the net profit margin rose by nearly 250 bps to 23% during the September 2009 quarter.

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