ITC records profit below estimates

Missing market estimates, ITC Ltd reported a 15.6 per cent rise in its net profit to Rs 3,120 crore on 14.7 per cent rise in net sales of Rs 13,947.53 crore for fiscal 2007-08. The company’s profit after tax (PAT) for the fourth quarter of the 2007-08 fiscal grew 14.1 per cent to touch Rs 735.64 crore on net sales of Rs 3,934.39 crore, which increased by 16.7 per cent over the previous year. However, this came after adjusting income tax refunds.

ITC shares dropped 4.2 per cent to Rs 213.60, its worst close in more than three weeks, after its quarterly earnings

missed market expectations. The board of directors recommended a dividend of Rs 3.50 per ordinary share of Re 1 each as against previous year’s Rs 3.10 per share. It implies a cash outflow of Rs 1,543 crore.

According to the company, ITC’s growth in the turnover and net profit was driven by a 49 per cent increase in non-cigarette FMCG business and healthy performances of its hotels, paperboards and paper packaging segments.

While the company’s branded packaged foods business continued to expand rapidly with sales growing by 57 per cent over the previous year, the lifestyle retailing business continued to enjoy a high brand salience with domestic sales going up by 26 per cent and exports by 17 per cent over the previous year.