ITC net profit jumps 16% to Rs 2,385 crore on huge rise in other income

India’s largest cigarette maker, ITC posted a 16 percent jump in quarterly net profit at Rs 2,385 crore against expectations of Rs 2,345 crore, led by a huge rise in other income.ITC, India’s third most valuable company, had reported a net profit of Rs 2050 crore in the same period last year.

The company’s sales for the third quarter ended December 2013 also beat expectations at Rs 86,23 croreas against Rs 7,627 crore in a year ago period.

Other income surged 59 percent on yearly basis to Rs 391 crore during the quarter.

A _CNBC-TV18 pol_l had expected profit after tax of Rs 2,345 crore (up 14.3 percent) on net sales of Rs 8,530 crore (up 11.8 percent) for the quarter.

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Cumulative price hikes as of Q3FY14 stood at 22.5 percent, but the price hikes effective during Q3 will be to the tune of 20 percent, analysts say.

The cigarette revenue for the third quarter stood at Rs 7.664 crore against, a 12.6 percent growth on year.

The hotel business gross revenue rise to Rs 315.5 crore from Rs 309.5 crore a year earlier.

Revenues from its agri-business grew 10 percent at Rs 1786 crore on a year-on-year basis while the paper business is up 18 percent at Rs 1335 crore.

The company’s FMCG (Others) gross revenue stood at Rs 2,083 crore against Rs 1789 crore in the year-ago period.

Earnings before interest, tax, depreciation and amortisation jumped 14.7 percent to Rs 3,181 crore and margin expanded 50 basis points to 36.9 percent in the December ended quarter as against analysts’ forecast of 18.3 percent and 210 basis points growth, respectively.

During the December ended quarter, ITC launched nicotine chewing gums under the brand Kwiknic. Currently the size of the nicotine chewing gum market is insignificant at Rs 20 crore. The distribution is largely done through pharmacists. The company is expected to distribute Kwiknic through its strong retail distribution network.