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ITC net profit grows 18.7%

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Foods, agri-biz, hotels drive growth in second quarter

Kolkata , Oct. 30

ITC Ltd has recorded a 32.3 per cent growth in net turnover during the second quarter ended September 30, 2006. The company has notched a net sales turnover of Rs 2,887.64 crore against Rs 2,183.15 crore recorded in July-September 2005. The growth in turnover has been attributed to the company's non-cigarette businesses, such as foods, agri-business and a strong performance by the company's hotels business.

ITC has recorded a profit before tax of Rs 957.76 crore (Rs 815.24 crore). The company's profit after tax rose 18.7 per cent to Rs 679.60 crore (Rs 572.33 crore).

The board of directors of ITC Ltd met here today to take stock of the financial results of the company for the quarter ended September 30, 2006.

Non-cigarette biz

According to a press release issued here, ITC's non-cigarette businesses grew by 53 per cent during the quarter and now account for 51.2 per cent of the company's net turnover.

The release states that the company's branded packaged foods business continued to expand rapidly with sales growing 54 per cent over last year. The Sunfeast range of biscuits stood further expanded with the introduction of Sunfeast Special in the fast-growing, mid-priced cookies segment. The quarter also saw the extension of Sweet n Salt Crackers to target markets. Product mix witnessed continued improvement on the back of enhanced sales of value-added products.

Retailing

The Lifestyle retailing business grew by 64 per cent during the quarter. The company's portfolio of products in the premium segment comprising the `Classic' range of formal wear, `Wills Sport' relaxed wear and `Wills Clublife' evening wear continued to expand consumer franchise during the quarter.

In the popular segment, the distribution reach of `John Players' was further strengthened through the expansion of the `exclusive brand outlet' network and increased presence in key `multi-brand outlets'.

In the safety matches business, the company's brands enjoyed strong consumer preference. The anticipated synergies arising out of the recent acquisition of WIMCO Ltd by the company's subsidiary, Russell Credit Ltd, were being progressively realised. Market standing of the company's `Mangaldeep' brand of incense sticks continued to be strengthened.

Cigarettes

With regard to the cigarettes business, the focus continues to be on delivering superior value to consumers through the introduction of modern format packaging in all segments and design enhancement of leading brands based on the latest technology. On the manufacturing front, investments were being channelised towards enhancement of quality, variety and productivity. The hotels business posted a strong performance during the quarter with segment revenues growing by 31 per cent to touch Rs 201 crore on the back of a 37 per cent growth in overall REVPAR (revenue per available room). Sales of value-added paperboards continued to record strong growth during the quarter, further enriching the product mix. These products now constitute approximately 50 per cent of the total paperboard sales.

Revenues from agri-business recorded a growth of 87 per cent during the quarter, driven primarily by exports of leaf tobacco and increased levels of trade in soya, non-basmati rice, chana and coffee.

The e-Choupal network was further ramped up during the quarter to 6,400 installations. The network now reaches out to over 3.5 million farmers in Madhya Pradesh, Haryana, Uttaranchal, Uttar Pradesh, Rajasthan, Karnataka, Maharashtra, Andhra Pradesh and Kerala, the release states.

More Stories on : Financial Performance | Diversified | Cigarettes | I T C Ltd

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