India's ITC beats Q1 profit view on strong FMCG demand, drop in expenses

Aug 14 (Reuters) - Indias ITC Ltd (ITC.NS) reported a bigger-than-expected rise in first-quarter profit on Monday, buoyed by strong demand in the FMCG segment and as expenses fell.

The cigarettes-to-hotels conglomerates profit rose 17.6% to 49.03 billion rupees ($590.28 million) in the quarter ended June 30 from 41.69 billion a year earlier.

Analysts, on an average, expected a profit of 48.29 billion rupees, according to Refinitiv IBES data.

ITCs revenue from operations fell more than 7% to 169.95 billion rupees, dragged by a 24% fall in its agricultural business.

The cigarettes business, which houses the Classic and Gold Flake brands, however, saw a 13% jump in revenue.

Its consumer goods segment that owns brands like Aashirvaad, Bingo and Yippie reported steady growth during the quarter, while improved out-of-home consumption drove demand for packaged foods, said analysts.

Sales in the fast-moving consumer goods segment, which includes its foods and stationery businesses, rose more than 16%. Total expenses fell by 14.7%.

Revenue from the hotels business, which received the approval for demerger into a separate company during the day, saw a more than 8% jump with a revival in domestic tourism and heightened demand from corporate bookings.

ITC Hotels will operate as an independent hospitality-focused listed entity, the company in a statement.

In consideration of the demerger, each shareholder will receive one share of ITC Hotels for every 10 shares held in ITC.

An indicative timeline for the listing of ITC Hotels is about 15 months, the company said.

ITCs shares closed 0.1% up ahead of results, having climbed nearly 18.5% during the June quarter.

Peers Dabur India Ltd (DABU.NS) cooking oil maker Marico Ltd (MRCO.NS) and Pepsi bottler Varun Beverages Ltd (VARB.NS) reported surging profit as easing inflation propped demand. However, Dove soapmaker Hindustan Unilever Ltd (HLL.NS) reported a smaller-than-expected increase in profit.

($1 = 83.0620 Indian rupees)