ITC, India’s largest cigarette maker, reported a 10% decline in quarterly profit, weighed down by higher raw material costs and a one-time charge linked to the rollout of the country’s new labor codes. Standalone profit fell to 50.9 billion rupees ($560 million) for the quarter ended December 31, while total expenses rose 5%, partly due to rising prices of leaf tobacco, edible oil, and wheat, according to Reuters.
Despite the profit drop, ITC’s cigarettes business — its biggest segment — posted an 8% rise in revenue, supported by steady volumes, even as leaf tobacco prices climbed amid stronger export demand. The company warned of further pressure on the sector after India imposed additional excise duty on cigarettes on top of a 40% goods and services tax, a move it said could fuel illicit trade among the country’s estimated 100 million smokers.
