ITC Ltd, India's largest cigarette maker, reported a better-than-expected 25% rise in quarterly sales as demand for smaller and cheaper cigarettes grew and its consumer goods business put in a stronger performance.
India's fourth-biggest company by market value said net sales rose to Rs. 91.6 billion ($1.5 billion), up by a quarter from the year-earlier period and beating a consensus forecast of 85.1 billion rupees from Thomson Reuters Starmine.
Net profit fell marginally short of expectations, rising 16% to Rs. 21.9 billion ($364 million) for the quarter ended June 30, compared with an estimate of Rs. 22.2 billion. ITC sells four out of every five cigarettes sold in India and is nearly 25%-owned by British American Tobacco.
ITC's consumer goods business, which includes packaged foods and personal care products, grew 11 percent.
Sharp hikes in excise duties of 11-72% announced for the Indian federal budget 2014/15 in June are likely to hurt sales volumes by an estimated 3.5% to 4% in the current fiscal year, analysts have said.
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