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ITC Net Rises 17% on Higher Cigarette Sales, Prices (Update1)  

TC Ltd., India’s biggest tobacco company, posted a 17 percent increase in first-quarter profit on higher cigarette prices and an increase in volumes, beating analysts’ estimates.

Net income rose to 8.79 billion rupees ($181 million) in the three months ended June 30, from 7.49 billion rupees a year earlier, ITC said in a statement to the Bombay Stock Exchange today. That compares with the 8.18 billion rupee median estimate of 12 analysts surveyed by Bloomberg News.

ITC, which gets about half its sales from cigarettes, raised prices of some brands after states including Delhi and Maharashtra raised value-added taxes. The Kolkata-based company is raising sales of shampoo, food and clothing as governments increase taxes on cigarettes and add restrictions on smoking. The government made it mandatory for all tobacco products manufactured after May 31 to carry graphic warnings.

“The company had pushed cigarette stocks in the quarter ahead of the government’s May 31 deadline for carrying pictorial warnings on packets,” said Abhijeet Kundu, an analyst at Antique Stock Broking Ltd. He has a “buy” rating on the stock. “There has been about a 5 percent growth in cigarette volumes.”

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