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ITC: FMCG's a drag 

ITC's FMCG business continues to pull down its profits and a break even point for this segment could be quite some time away. The disappointing 11.5 per cent growth in FMCG revenues in the December 2008 quarter -- way below the 30 per cent seen in the first half of the year -- indicates that the cigarette major is finding it hard to take away share from incumbents in the personal care and snack foods spaces.

What's more high marketing and brand-building spends are pushing up losses -- up 95 per cent to Rs 127 crore in the December 2008 quarter.

These losses, together with a worse than expected fall in profits of 34 per cent from the hotels division, left the company with a net profit growth of just 8.6 per cent at Rs 903 crore. That's despite the cigarettes business beating both price increases, and a ban on smoking in public places, to turn in a decent 11 per cent growth in the top line and 18 per cent at the segment profits level. Cigarette volumes however fell slightly.

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