The FMCG segment performed well despite weak demand and rising competition from local players as it pursued growth through premiumisation, cost-management and strategic pricing. The segment’s revenue grew 9.6 percent, with operating income rising 19.7 percent to Rs 2,338.50 crore, and operating margin improving by 94 bps to 11.2 percent.
When it come to the cash-cow cigarettes, after a period of sustained growth, the business saw volume consolidation due to subdued demand and high illicit trade. Premium offerings performed well, and increased costs from leaf tobacco prices and taxes were managed through improved product mix, cost management and pricing strategies. Trade marketing was restructured for better execution, the company said.
The company blamed the high taxes on legal cigarettes for the growth in illicit trade, making India the third largest illicit cigarette market globally. This has led to revenue loss, poor quality products, and a negative impact on tobacco farmers, the Kolkata based company said, adding however, recent tax stability has helped the legal industry regain some volume, boosting demand for domestic tobacco and reducing tax losses.
Meanwhile, the hotels segment saw record highs in revenue and profit, driven by strong average revenue growth from retail and marquee events. The segment saw a revenue of Rs 2,989.50 crore and earned an operating income of Rs 1,049.88 crore, up 15.6 percent and 26.2 percent on-year respectively.
