FMCG major ITC announced their 3rd quarter results on 21st January. They were able to post a net profit of Rs.2635 crores from a revenue of Rs.8942.59 crores. But the stocks has dipped by 4% because of the muted performance. I just wanted to know about the various segment performances and the contribution towards the topline and bottomline growth.
First lets see the overall performance of ITC during Q3-2014 (Read the complete details from http://www.itcportal.com/about-itc/shareholder-value/key-financials/Q3-1415.pdf)
Now lets see the performance of various segments
ITC has diversified business activities that includes mainly 5 segments. They are
FMCG (Cigarettes and others including packaged foods, snacks, apparels, education and stationery products, personal care products etc)
Hotels
Paperboards and packaging
Agribusiness
Information Technology
Standalone details contain the revenue and income details about the first 4 categories. So lets have a look at the figures
From these figures we can conclude that Cigarettes is the main driver of ITCs bottomline growth. It contributes only 42% to the standalone revenues, but when it comes to profit, it has a whopping 86% share of total standalone profit.
Earnings from Cigarettes is very much sensitive to the policy actions of the government. That is the reason why company has diversified into several other segments. Hotels, agribusiness, paperboards and packaging contributes around 14% to the standalone profit. But FMCG others category was not able to contribute to the bottom line even though it has a robust 23% share in revenues. It is because company is investing heavily in brand building and business development processes. So we can expect that in the coming years this category will also have a significant contribution towards the bottomline, considering our consumption oriented society and demographic dividend.
Notes:
All the details are of 3 months ended 31-12-2014 (standalone). All figures are in INR crores
The financial results obtained from http://www.itcportal.com/about-itc/shareholder-value/investor-relations.aspx
The complete details obtained from http://www.itcportal.com/about-itc/shareholder-value/key-financials/Q3-1415.pdf
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