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British American Tobacco Share News (BATS)

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Share News for British American Tobacco (BATS)

Share Price: 2,840.00Bid: 2,847.50Ask: 2,849.00Change: 0.00 (0.00%)No Movement on Br.amer.tob.
Spread: 1.50Spread as %: 0.05%Open: 2,850.00High: 2,865.00Low: 2,825.00Yesterday’s Close: 2,840.00

UPDATE 1-India's ITC profit rises 26 pct as price hikes aid

Fri, 25th May 2012 12:40

By Nandita Bose

MUMBAI, May 25 (Reuters) - ITC Ltd, India's largest
cigarette maker, reported a better-than-expected 26 percent rise in quarterly profit as higher prices and strong results at its food and agricultural business protected margins from slipping cigarette volumes.

The conglomerate has been forced to increase cigarette prices by 11 percent since the federal budget in March raised taxes on tobacco, triggering some concern among investors as volumes, according to analysts, moderated for the third straight quarter.

ITC's net profit rose to 16.14 billion rupees ($289.4 million) in the fiscal fourth quarter ended March from 12.8 billion rupees a year earlier.

'Consistently if you take price hikes, volumes are bound to suffer and the slight dip there is dampening sentiment,' said Naveen Trivedi, an analyst with Karvy Stock Broking.

'But their agri-business and foods has done well and offset some of the impact,' he said.

Analysts on average had expected ITC, 25.4 percent owned by British American Tobacco Plc, to report a net profit of 15.7 billion rupees, according to Thomson Reuters I/B/E/S.

The company also reported other income of 2.07 billion rupees this quarter, compared with 1.13 billion rupees a year ago.

The company, which also makes consumer goods of everyday use such as soaps, shampoos along with processed food items and exports agricultural commodities, said net sales grew 17.5 percent to 68.6 billion rupees.

Sales at the company's agri-business, which gets a fifth of its revenue from exports of items such as basmati rice, processed fruits and soymeal, rose 31 percent from the same period a year ago as a sliding rupee bolstered earnings.

The rupee has lost 12.7 percent against the dollar from its 2012 peak in February.

ITC's fast moving consumer goods business, excluding cigarettes but including packaged foods and personal care products, has grown 24 percent.

Brokerage ICICI Direct expects the company, which gets nearly half of its revenue from cigarettes, to hike prices by another 8 percent this year.

Cigarette volume growth dipped to around 5 percent from 6 percent in the same period a year earlier, analysts said.

Shares in ITC, seen as a defensive stock in a slowing Indian economy, ended 0.64 percent weak after rising 16 percent in 2012, slightly more than the sector index's 14 percent gain.

The stock trades at 24.9 times its 12-month forward earnings, compared with peers Hindustan Unilever's, 25.6 times, Nestle India's 32.2 times and Godrej Consumer's 20.5 times, according to Thomson Reuters Starmine Smart Estimate.

($1 = 55.7800 Indian rupees)

(Reporting by Nandita Bose; Editing by Aradhana Aravindan) Keywords: INDIA ITC/EARNINGS

(nandita.bose@thomsonreuters.com)(022-66367374)(Reuters Messaging: nandita.bose.reuters.com@reuters.net)

Copyright Thomson Reuters 2012. All rights reserved.
The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.

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