ITC Misses Profit Estimate

ITC’s profit rose 3 percent to INR50.78 billion ($604.2 million) in the quarter that ended Sept. 30, missing estimates of INR51.14 billion, reports Reuters. The company cited subdued demand conditions, unusually heavy rains in parts of India and a sharp escalation in certain input costs, among other factors.

Higher prices of raw materials, such as tobacco leaf and crude oil, also weighed on the consumer goods sector’s earnings for the July-September period. The increase in leaf tobacco prices was partly mitigated through improved mix, calibrated pricing and strategic cost management, according to ITC.

In the cigarette business, net segment revenue was up 7.3 percent. ITC said the business continues to counter illicit trade and make strategic portfolio and market interventions “with focus on competitive belts to reinforce market standing.”

The company also noted in a statement that recent stability in cigarette taxes, backed by deterrent enforcement, enabled volume recovery for the legal cigarette industry from illicit trade, leading to higher demand for Indian tobaccos and bolstering revenue to the exchequer from the tobacco sector.