ITC Reports Growth in Cigarette Business

ITC reported gross Revenue of INR694.46 billion ($8.34 billion) for the 12 months that ended March 31, up 6.8 percent over the comparable period a year earlier. Net revenue of conglomerate’s cigarette businesses was up 7.1 percent.

“After a period of sustained growth momentum, the business witnessed consolidation in volumes on a high base amidst subdued demand conditions in the overall consumption space, even as illicit trade remained at elevated levels,” the company wrote in a statement.

“Differentiated and premium offerings saw robust traction during the year. Sharp escalation in leaf tobacco prices and other inputs, along with increase in taxes were largely mitigated through improved mix, strategic cost management and calibrated pricing.”

During the reporting period, ITC launched several new cigarette brands, including Classic Alphatec, Classic Icon and Gold Flake Indie Mint.

The company continues to be concerned about the strength of the illicit market. While recent stability in cigarette taxes has enabled the legal cigarette industry to claw back some of the volumes lost to illegal traders, India remains the world’s third largest illicit cigarette market, according to ITC, with tax-avoiding products accounting for roughly one-third of the market.

The company said it continues to engage with policy makers for a framework of evidence-based regulations and taxation policies that balance India’s economic imperatives and tobacco control objectives.