Advertisement

HindustanTimes Mon,22 Sep 2014

ITC profit up 21% as cigarette volumes improve

Reuters  Mumbai, January 18, 2013
First Published: 23:20 IST(18/1/2013) | Last Updated: 01:57 IST(19/1/2013)

India's biggest cigarette maker, ITC Ltd, beat estimates with a 21% rise in quarterly profit as cigarette volumes improved after four quarters of stagnant growth, aided by the launch of low-cost products during the quarter.

Advertisement

The company's net profit rose to Rs. 2,051.9 crore for the quarter ended December 31. Net sales rose 23% to Rs. 7,627.1 crore.

Higher taxes and tighter anti-smoking regulations in several states have impacted sales of the company, which makes four out of every five cigarettes sold in India.

Cheaper smokes improved volume growth by 2-3% after a marginal increase of 0.4% in the previous quarter, according to three analysts briefed by the company. ITC does not provide details of sales volumes in its earnings statements.

http://www.hindustantimes.com/Images/Popup/2013/1/19_01_13-buss27b.jpg

"The cigarette industry in India continues to be impacted by a discriminatory taxation and regulatory policy framework," the company said in a statement.

"The high incidence of tax on cigarettes has created tax arbitrage opportunities leading to the growth of illegal cigarettes in the country. Consequently, legal industry volumes have come under severe pressure," the statement said.

ITC, which is 30.8% owned by British American Tobacco PLC, generates about half its revenue from cigarettes. The company also owns hotels and makes products including soap and shampoo.

"The non-cigarette business has shown a good jump. This is a good sign because the company has been focusing heavily on diversification," said Naveen Trivedi, an analyst with Karvy Stock Broking Ltd. in Mumbai.


Advertisement
more from Business

Maruti's hold on best selling car models in India continues

Country's largest car-maker Maruti Suzuki India continues its dominance on the Indian roads, with its four models, led by entry-level small car Alto, heading the top ten best sellers list in April-August period this fiscal.
markets
Advertisement
Most Popular
Advertisement
Advertisement
Copyright © 2014 HT Media Limited. All Rights Reserved