ITC reported a net profit of INR36.29 billion ($504.14 million) for the three months ending Dec. 31, 2020, down 3.7 percent from comparable 2019 quarter. Gross revenue stood at INR124.92 billion, up 5 percent and driven mainly by the Indian company’s agribusiness and other fast-moving consumer goods segment.
Cigarette volumes and revenue witnessed strong sequential recovery during the reporting period, led mainly by urban markets on the back of progressive easing of Covid-19-related restrictions and enhanced mobility.
ITC launched several new brands of cigarette variants, including Gold Flake Neo, Classic Connect, American Club Clove Mint, Gold Flake Indie Mint and Capstan Fresh Flavour, catering to evolving consumer preferences.
“The operating environment remained challenging even as economic activity picked up pace progressively during the quarter with the easing of restrictions and increased mobility,” ITC wrote in a press statement. “High frequency lead economic indicators pointed to green shoots of recovery in aggregate demand and supply, leading to upward revisions in GDP growth estimates for FY 2020 to 21.”
A 13 percent tax hike that came into effect in February 2020 continues to weigh on legal industry volumes, according to ITC. “Wide availability of smuggled cigarettes continues despite deterrent actions and heightened levels of seizures by concerned authorities,” the company wrote.
In its Union Budget 2021, India’s central government kept the cess and taxes on tobacco unchanged.
With a share of nearly 80 percent, ITC is the undisputed market leader in India’s factory-made cigarette segment.