ITC Ltd has has posted a net profit of Rs. 18364.20 mn for the quarter ended September 30, 2012 as compared to Rs. 15143.10 mn for the quarter ended September 30, 2011.
Total Income has increased from Rs. 62752.30 mn for the quarter ended September 30, 2011 to Rs. 74115.60 mn for the quarter ended September 30, 2012.
Branded Packaged Foods
The business recorded significant growth during the quarter across all major categories. An enriched sales mix combined with smart commodity sourcing and supply chain optimisation helped enhance profitability. Sunfeast biscuits sustained its robust growth trajectory led by a portfolio of differentiated and innovative products such as Dream Cream, Dark Fantasy Choco Fills. The brand has emerged as the clear market leader in the highly competitive premium cream biscuits segment.
Sunfeast Yippee! Noodles and the Bingo! range of savoury snacks continued to enhance consumer franchise during the quarter, leveraging a highly innovative product portfolio. The business has built a healthy pipeline of innovative variants and product formats to further enhance its market standing in these high growth categories.
Aashirvaad atta further consolidated its leadership position across markets aided by increasing consumer traction for the value added and premium offerings viz. 'Select' and 'Multi-grain' variants.
The business continues to invest in disaggregated manufacturing and distribution infrastructure with a view to optimising supply chain costs and improving market servicing.
Personal Care Products
The business sustained its impressive growth trajectory during the quarter with the Soap category garnering significant consumer franchise driven by the 'Vivel Luxury Creme' and 'Vivel Clear' variants.
Product portfolio was strengthened during the quarter with the launch of a new variant - ‘Exotic Dream’ transparent gel bar - in select markets under the Fiama Di Wills brand.
The business rolled out its products in the Skin Care and Shampoo categories to target markets during the quarter. Consumer response to recent launches such as 'Vivel Summer Fair', a differentiated summer offering for fresh and fair skin, has been encouraging.
The business continues to focus on Research & Development to launch high quality and innovative products. 'Laboratoire Naturel' - the state-of-the-art consumer and product interaction centre set up by the business in Bengaluru - is being increasingly leveraged to connect the R&D and brand teams to the Indian consumer with a view to launching products with unique and differentiated benefits.
Education & Stationery Products
Classmate notebooks registered an impressive growth during the quarter, further consolidating its leadership position in the student notebook category.
The business continues to strengthen the Paperkraft brand, its premium executive and office supplies range. The business has positioned 'Paperkraft' as the finest green paper for business applications viz. copy-scan-print-fax, leveraging the Company's world-class fibre line at Bhadrachalam which is India's first ozone treated elemental chlorine free facility. Paperkraft's green credentials are supported, among other factors, by the Company's membership of the prestigious Global Forest & Trade Network, an international initiative of the WWF (World Wide Fund for Nature).
The continuing discriminatory taxation and regulatory framework against cigarettes in India, which account for only 15% of overall tobacco consumption, is a major cause of concern. The steep increase in the tax rates on cigarettes over the years, both at the Central and at the State level, has led to the undesirable consequence of shifting consumption patterns to lightly taxed or tax evaded tobacco products like Bidi, Khaini, Chewing Tobacco and Gutkha which constitute 85% of overall tobacco usage in India besides providing a fillip to illegal cigarette trade.
The sharp increases in Excise duty and VAT on cigarettes during the year have further exacerbated the problem of discriminatory and high taxation on cigarettes within the tobacco industry. Consequently, industry volumes have come under severe pressure.
Despite these challenging conditions, the Company’s cigarettes business, through its relentless focus on providing differentiated and world-class products to consumers, sustained its leadership position in the industry. Focus on innovation and consumer centricity supported by world-class brands, contemporary packaging formats and state-of-the-art manufacturing facilities and a deep and wide distribution network have enabled the business to consistently deliver superior value. During the quarter, several initiatives were launched across the brand portfolio viz., Classic, Gold Flake, Flake, Navy Cut including pack modernisation, introduction of new variants and limited edition packs leading to further enhancement of market standing. The launches in the new filter segment (cigarette length not exceeding 65 mm) have met with favourable consumer response and the business is rolling out the products to target markets.
The hospitality sector continued to be adversely impacted by the weak economic conditions prevailing in key international source markets and India on the one hand and significant additions to room supplies in key Indian cities on the other. Consequently, growth in Segment Revenues was muted during the quarter.
During the quarter, the Company unveiled its latest offering in the super premium segment - ITC Grand Chola at Chennai. The hotel has achieved the distinction of being the world’s largest 'Leadership in Energy and Environmental Design' (LEED) Platinum rated hotel under the New Construction category bolstering the unique positioning of ITC Hotels as the greenest luxury hotel chain in the world.
Construction activity of the new luxury properties at Kolkata and at the Classic Golf Resort near Gurgaon is progressing as per plans.
PAPERBOARDS, PAPER & PACKAGING
Segment Revenues grew by 6% during the quarter, aided by improved realisations and product mix enrichment. Segment Results were, however, impacted by the steep hike in input prices particularly that of wood. The business is investing in a state-of-the-art paperboard machine at Bhadrachalam and new packaging & printing facilities at Haridwar which are expected to become operational shortly. The business continues to provide strategic sourcing support to the FMCG businesses enabling product differentiation and faster speed-to-market.
Segment Revenues recorded a robust growth of 41% during the quarter aided by wheat exports. Operations at the recently commissioned state-of-the art green leaf tobacco threshing plant in Mysore were scaled up leading to enhanced quality and supply chain efficiencies. The business continues to provide strategic sourcing support to the Company’s Cigarettes and Branded Packaged Foods business by ensuring high quality supplies at competitive costs.
CONTRIBUTION TO SUSTAINABLE DEVELOPMENT
The Company’s Social Investments Programme aims to address the challenges arising out of poverty, environmental degradation and climate change through a range of activities with the overarching objective of creating sustainable sources of livelihood for the stakeholders. The footprint of the Company’s Social Investments Programme has spread to 57 districts in the States of Andhra Pradesh, Bihar, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Rajasthan, Tamil Nadu, Uttar Pradesh and West Bengal.