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ITC Profit Beats Estimates on India Cigarette Prices (Update2) 

ITC Ltd., India's biggest tobacco company, said third-quarter profit rose 16 percent, more than analysts anticipated, on higher cigarette prices.

Net income rose to 8.31 billion rupees ($212 million) in the three months ended Dec. 31 from 7.17 billion rupees a year earlier, the Kolkata-based company said in a statement today. That compares with the 8.05 billion rupee median estimate of seven analysts surveyed by Bloomberg News.

ITC, 32 percent owned by British American Tobacco Plc, is expanding sales of shampoo, snack food, clothing and other goods as the Indian government increases taxes and restrictions on cigarettes, which account for about half its revenue. The company raised cigarette prices by about 20 percent last year. . . .

``The cause for anxiety, however, stems from the steep increase in indirect taxes on cigarettes in India,'' ITC said in a statement. The additional indirect taxes during the quarter aggregated to 5.13 billion rupees, the company said.

The government plans to ban smoking in public places, except designated areas in restaurants and airports from May 31, the Hindustan Times reported on Jan. 12, citing Health Minister Anbumani Ramadoss.

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