Crompton Greaves reports 25% fall in Q2 consolidated net profit

Crompton Greaves Ltd reported a 25 per cent decline in consolidated net profit at Rs 52.14 crore for the fiscal second quarter that ended on September 30, 2015. Lack of trading opportunities in agri-commodities and prolonged disruption in the instant noodles category compounded the woes.

Agri business revenue for the quarter under review dipped by 10.5 per cent to Rs 1,874 crore (Rs 2,059 crore); while paperboards, paper and packaging segments saw a little over two per cent dip to Rs 1,254 core (Rs 1,284 crore).

"Reduction of import duties under various free trade agreements, especially with Asean, which became effective from 1 January 2014, weighed on the performance of the domestic paper and paper board industry". Cheap imports from China also adversely impacted the domestic industry. "Consequently, segment revenue and profit remained subdued during the quarter", the statement said.

Losses from FMCG businesses (excluding cigarettes) widened marginally to Rs 11.10 crore from Rs 10.31 crore in the year ago period while revenues grew 7% to Rs 2351.62 crore.

"High incidence of taxation and a discriminatory regulatory regime on cigarettes in India have over the years led to a significant shift in tobacco consumption to lightly taxed or tax-evaded tobacco products like bidi, khaini, chewing tobacco, gutkha and illegal cigarettes which presently constitute over 89% of total tobacco consumption in the country".

During the quarter, revenue from cigarettes increased by 1.56 per cent to Rs 4,317.18 crore, from Rs 4,250.86 crore in the corresponding quarter in 2014-15.