ITC offers 2:1 bonus shares, Q4 net up 6%

Kolkata: Tobacco-to-FMCG-to-hotel conglomerate ITC has declared a 2:1 bonus share issue on Friday. So after almost six years, shareholders will get one share for every two they own. The board of directors of ITC also recommended a dividend of Rs 8.50 per share. The diversified conglomerate had last declared a bonus during its centenary in 2010. The ITC scrip was up by 1.6% and closed at Rs 330 following the announcement. The total cash outflow owing to dividend will be Rs 8,232 crore.

The company witnessed a 5.7% rise in net profit at Rs 2,495 crore in the fourth quarter ended March 31, 2016, compared to Rs 2,361 crore in the year-ago period. The revenue during the quarter grew to Rs 10,062 crore from Rs 9,292 crore in the year-ago period.

Excluding exports of agri-commodities, gross revenue for the year grew by 6.4%. Profit before tax (PBT) registered a growth of 6.9% to Rs 14,958 crore, while net profit at Rs 9,845 crore increased by 2.5%. ITC has stated that the muted growth in revenue during the quarter reflects the continuing impact of higher taxes and regulatory pressures on the legal cigarette industry, weak demand conditions in the FMCG industry and synchronization of trade pipeline in the notebooks category.

PBT for the quarter jumped 14.4% aided by favourable base effect, benign input costs and gross margin expansion in the FMCG-others segment.

Executives said FMCG-cigarettes segment continues to be hit by severe pressure on the legal cigarette industry volumes even as illegal trade grows unabated. The new FMCG-segment registered revenue growth of 7.7% amid sluggish demand conditions and price deflationary environment. Most categories record improvement in market standing. The new FMCG segment has also witnessed a surge in profit from Rs 48.5 crore in the Q4 of 2015-16 to Rs 70.8 crore in the last quarter.

The hotels segment revenue was up by 8.4%, aided by healthy growth in occupancy and food & beverage revenue. This segment results include the impact of gestation costs of ITC Grand Bharat and business disruption caused by heavy rain in Chennai during November-December 2015.