Cigarette company ITC, which also has interests in consumer goods, reported 12.1 percent rise in standalone net profit for the fourth quarter (Q4) ended March 2017 on the back of Rs 500-crore savings in excise duty paid by the company.
The Kolkata-based company's Q4 net profit stood at Rs 2,669.4 crore as against Rs 2,380.6 crore in the year-ago period, since excise duty paid fell to Rs 3,883 crore in Q4 (Rs 4,383 crore last year).
Revenues rose 6.2 percent to Rs 15,410 crore in Q4 from Rs 14,510 crore in the year-ago period. Cigarette contributed Rs 8,954 crore, or almost 58 percent to the total revenues while the rest came from agriculture, hotels, paperboards and other consumer goods business.
"The company delivered steady performance during the year in the backdrop of a persistently sluggish demand environment, continuing pressure on the legal cigarette industry due to the cumulative impact of steep increase in taxation and regulatory pressures, sharp hike in input costs and gestation costs relating to new products/categories especially in the non-cigarette FMCG segment," ITC said in a statement.
"India's per capita cigarette consumption is amongst the lowest in the world and is significantly lower in comparison to Russia, Japan, China, United States, and even neighbouring countries like Pakistan and Bangladesh," the company added.
The company declared a dividend of Rs 4.75 per share.
ITC is being seen as largely remaining unaffected by the proposed GST rates announced by the GST Council last week with some even viewing as slightly beneficial for cigarette makers.
While the GST rate is 28 percent with a 5 percent cess, along with an additional cess based on the length of cigarettes (either 290 percent or Rs 4,170 per thousand sticks or a combination of both). The "World No Tobacco Day" on May 31 will be observed this year with the theme ""Tobacco – a threat to development."
Godfrey Phillips India, VST Industries, Golden Tobacco and NTC Industries are the other listed cigarette companies in India.
The share price of ITC closed at Rs 308.65 on the Bombay Stock Exchange (BSE) on Friday, translating into a gain of 10.79 percent since May 18, when the stock closed at Rs 278.
The six-month gain, based on November 28, 2016 closing price of Rs 233), comes to 32 percent.
The BSE Sensex closed 278 points higher at 31,028 on Friday.
