STATESMAN NEWS SERVICE
Kolkata, 25 October
Diversified conglomerate ITC today reported a 21.5 per cent growth in net profit for the second quarter of this financial year.
The company’s net profit for the quarter ended 30 September 2013 stood at Rs 2,230.53 crore compared with Rs 1,836.42 crore for the quarter ended 30 September 2012, it said in a filing with the Bombay Stock Exchange.
Total income of the company during the quarter under review increased to Rs 8,108.72 crore from Rs 7,410.30 crore in the corresponding quarter of the previous fiscal, the filing said.
"The company posted another quarter of robust performance with healthy growth in revenue and profits notwithstanding a challenging business environment engendered by a marked slowdown in consumption expenditure, sustained high inflationary conditions and the steep hike in excise duty on cigarettes announced in the Union Budget 2013," ITC said in a separate statement issued here.
After adjusting for the high level of wheat exports during the quarter, underlying net revenue growth during the quarter stood at 15.2 per cent, driven mainly by the branded foods businesses, paperboards and leaf tobacco exports, the statement said.
Non-cigarette FMCG segment registers a healthy revenue growth of 15.7 per cent despite a sluggish demand environment, it said.
As regards cigarettes business, the company said discriminatory and punitive taxation coupled with a growing incidence of smuggling and illegal manufacture are the biggest challenges confronted by the domestic cigarette industry. 
"These challenges were further compounded during the year by the steep increases in excise duty on cigarettes for the second successive year and, discriminatory and punitive increases in value added tax (VAT) on cigarettes by some states," it added.
The company’s hotels business, however, continues to be impacted by the weak macro-economic environment and a spurt in room additions in key markets, it said.
ITC’s agri business recorded an underlying growth of 8.5 per cent in segment revenue with significant improvement in profitability, while paperboards, paper & packaging segment revenue was up by 11.7 per cent during the second quarter, driven by paperboards and flexible packaging. Sharp escalation in input costs (particularly of wood), however, impacted the profitability of the segment, the company said.