Thursday , May 19 2022

ITC's quarterly profit outperforms estimates of the sale of cigarettes in India



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MUMBAI (NevsRise) – ITC, the largest cigarette producer in India, recorded a better net profit than expected in the third quarter, fueled by the growth of tobacco and consumer companies.

The company, also known by the Mauri hotel chain, said consolidated net revenue for the quarter, which ended in December, rose 3.9% to 32.1 billion rupees ($ 450 million). Analysts expect the ITC to report a net income of 31.34 billion rupees, according to Refinitive data.

The quarter earlier, he had outstanding items worth 4,13 billion rupees due to the refusal of some provisions. Operating revenues rose 15 percent to 113.40 billion rupees.

Growth is driven by increased volumes, improved product mix and cost control measures, according to the ITC statement. The company witnessed an increase in input costs due to continuous investment in new jobs and start-up costs for new facilities, the report added.

Still, the job of cigarettes continues to be a "highly challenging work environment," the ITC said.

The sales of cigarettes, which account for more than three quarters of ITC's operating profits, rose by more than 9.6% to 50.73 billion rupees. Operating profit in the unit increased by 8.8%.

The ITC is recovering from a prolonged tax increase period that has fueled illegal trade, as well as a regulatory reduction in smoking. Indian authorities are trying to create public awareness of tobacco-related health issues, launch anti-smoking campaigns, and force companies to display larger graphic images on cigarette packets. The Indian cigarette market, worth 11 billion dollars, is dominated by three ITC players at the top, followed by Godfrey Phillips India and VST Industries, according to Anand Rathi, a brokering agency.

The volume of ITC sales increased by 5% in the quarter, according to the ICICI Direct report. "The company should be able to complete the year in full yearly growth of 4% -5%," the statement said.

The brokerage house expects ITC to complete the year with operating margins of 6%, since the fourth quarter is the most profitable for the company.

Sales in consumer transactions, which include branded goods, equipment and personal care products, rose by more than 11% in the quarter. Companies engaged in the production of consumer goods in India are strengthening demand from rural areas after a fairly good distribution of monsoon rains that have contributed to the increase in farm income.

ITC's shares lost 4.2% in trading in Mumbai, while reference S & P BSE Sensek dropped by 0.9%.

– Dhana Ann Thoppil

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