India's biggest cigarette maker, ITC Ltd, said its fourth-quarter net profit grew 18 percent, beating estimates, as price hikes and a pick-up in low-cost cigarette consumption boosted margins, even as sales volumes fell.
The company, nearly 25 percent-owned by British American Tobacco, said in a statement net profit rose to Rs 22.78 billion ($389.37 million) for the quarter ended March 31 from 19.3 billion a year earlier. That was slightly ahead of the 22.16 billion rupees analysts had forecast, according to Thomson Reuters Starmine Estimates.
Higher taxes and tighter anti-smoking regulations in several Indian states have cut into sales at the company, which makes four out of every five cigarettes sold in India.
Sales volumes fell 3 percent as customers cut discretionary spending, but a sharper fall was arrested by cheaper smokes whose sales begun to pick up, according to three analysts briefed by the company.
"The upcoming federal budget will be key to finding out how the government decides to tax this category and which way volumes are headed for the rest of the year," said V. Srinivasan, analyst with Angel Broking.
Total revenue rose 12 percent in the quarter to 91.45 billion rupees from 81.2 billion a year earlier. ITC generates about half its revenue from cigarettes, but also owns hotels and makes products including soap and shampoo. It said revenue from its non-cigarette consumer business grew 13 percent to 23.1 billion rupees.
Shares in ITC Ltd, India's fourth-biggest company by market value and a staple for fund portfolios, traded 0.4 percent up after the results were released while the benchmark Mumbai index was up 0.78 percent. ITC stock has risen about 7 percent since the start of the year, while the benchmark consumer index has risen 4 percent.
($1 = 58.5050 Indian Rupees)
ITC Q4 net up 18.16% at Rs 2,278.01 cr
New Delhi, May 23 (PTI) Diversified group ITC today posted 18.16 per cent rise in standalone net profit at Rs 2,278.01 crore for the fourth quarter ended March 31.
It had posted Rs 1,927.9 crore profit in the January-March quarter of the previous fiscal (2012-13).
Net sales in Q4, 2013-14 rose by 11.79 per cent to Rs 8,180.3 crore, from Rs 8,623.11 crore, ITC said in a BSE filing.
Shares of ITC were trading at Rs 346.8 apiece in the afternoon trade, up 0.58 per cent from its previous close on the BSE.