ITC Q1 sales jump on demand for smaller smokes, consumer goods

ITC Ltd, the country's largest cigarette maker, reported a better-than-expected 25 per cent rise in quarterly sales as demand for smaller and cheaper cigarettes grew and its consumer goods business put in a stronger performance.

ITC, India's fourth-biggest company by market value, said net sales rose to Rs 91.6 billion ($1.5 billion), up by a quarter from the period last year and beating a consensus forecast of Rs 85.1 billion from Thomson Reuters Starmine.

Net profit fell marginally short of expectations, rising 16 per cent to Rs 21.9 billion ($364 million) for the quarter ended June 30, compared with an estimate of Rs 22.2 billion.

ITC sells four out of every five cigarettes sold in India and is nearly 25 per cent-owned by British American Tobacco.

The company's consumer goods business, which includes packaged foods and personal care products, grew 11 per cent.

Sharp hikes in excise duties of 11-72 per cent announced for the federal budget 2014-15 in June are likely to hurt sales volumes by an estimated 3.5 to 4 per cent in the current fiscal year, analysts said.