Profits Up at Indian Cigarette Makers

ITC’s reported a profit of INR55.72 billion ($670.3 million) for the three months that ended Dec. 31, up nearly 11 percent over the comparable 2023 period, the company announced on its website.

The consumer goods giant benefited from higher demand for its cigarettes as a crackdown on the smuggling of international cigarette brands reduced competition. A sharp escalation in costs of leaf tobacco and certain other inputs, along with increase in taxes were largely mitigated through improved mix, strategic cost management and calibrated pricing.

The company’s cigarette business, which contributes more than 40 percent of ITC’s top line, grew 3.6 percent over the period. Its paperboards, paper and packaging business, by contrast, struggled with competition from China and sluggish economic conditions in some of its export markets. The segment’s revenue declined almost 10 percent.

ITC’s hotel business, which the conglomerate plans to spin off into a separate entity, reported  an 18 percent jump in revenue, driven by a strong revival in domestic tourism and heightened demand from corporate bookings.

ITC competitor Godfrey Phillips India (GPI) also reported improved performance for the third quarter, according to Reuters. The company posted a consolidated net profit of INR2.12 billion, up 6.6 percent over the comparable 2023 quarter. Total revenue from operations rose 34 percent to 14.88 billion rupees, with the company’s core cigarettes segment registering a growth of 37 percent.

GPI attributed its performance to growth in its core segment and easing expenses. The company manufactures and distributes Marlboro-branded cigarettes under a license agreement with PMI.

The growth in the cigarette segment was led by the Marlboro Compact, which is priced at INR10 apiece.