ITC reports 26 percent rise in quarterly profit

ITC reports 26 percent rise in quarterly profitIndia's largest cigarette maker, ITC has reported a 26 per cent rise in profits during the fourth quarter till March 2012 mainly due to higher prices and strong performance of its food and agricultural business.

The company's net profit increased 16.14 billion rupees in the fourth quarter of the fiscal year till March 2012. It had reported a net profit of 12.8 billion rupees a year earlier. Market analysts were expecting the company to report a net profit of 15.7 billion rupees, according to Thomson Reuters I/B/E/S.

The company reported other income of 2.07 billion rupees this quarter compared to 1.13 billion rupees a year ago. Its net sales grew 17.5 percent to 68.6 billion rupees. The sales from the agricultural business, which accounts for a fifth of its revenue from exports, increased 31 percent from the same period in the previous year.

The declining cigarette volumes were more than offset by the growth in the company's food and agricultural business and allowed the company to post better than expected results. The company had to increase cigarette prices by 11 percent due to higher taxes on taxes on tobacco. This resulted in a fall in volumes and analysts expressed concerns.