ITC reports 20% drop in quarterly profit as higher prices curb cigarette demand
India's leading tobacco company ITC posted a 20% fall in profit for the quarter ended September 30, citing rising raw material costs and higher cigarette prices that weakened demand.
India's top cigarette manufacturer ITC Ltd said its profit fell 20% in the quarter ending September 30, with earnings from its cigarettes segment dropping more than 25% to 41.37 billion rupees ($436 million). The company attributed the decline to a sharp rise in input costs, which increased 15%, and to higher retail prices that dampened consumer demand.
Despite the profit dip, total revenue rose 46% to 283.18 billion rupees, driven by strong sales of its broader consumer-goods portfolio, including brands such as Sunfeast and Aashirvaad. In an investor presentation, ITC noted that “industry volumes remain under pressure due to unprecedented increase in tax.”
The firm said domestic demand remained resilient across both rural and urban markets, but warned that uneven monsoons and a strengthening El Niño could threaten agricultural output and inflationary pressures.
($1 = 94.8550 Indian rupees)