India’s ITC tops profit view on higher cigarette, consumer goods sales

Indian conglomerate ITC reported a slightly better-than-expected first-quarter profit on Friday, buoyed by higher sales of cigarettes and packaged food, including instant noodles.

The company posted a standalone profit of 49.12 billion rupees ($561.68 million) for the quarter ended June 30, slightly down from 49.18 billion rupees a year earlier.

That was, however, just above analysts’ average estimate of 49.1 billion rupees, according to data compiled by LSEG.

Revenue from its cigarettes division, its largest segment, grew 8%, while its other consumer goods business grew 5%, partly supported by steady rural demand.

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This lifted its overall first-quarter revenue by nearly 20% to 210.59 billion rupees.

Rural demand recovery that started two years ago, driven by strong harvests and welfare schemes, has cushioned the impact of sluggish urban sales.

ITC has been steadily expanding its rural presence over the last three years by growing its network of local distributors by nearly 40%.