ITC Suffers Unexpected Volume Decline

Source from:  Tobacco Reporter 07/30/2012

ITC Ltd, which supplies four out of every five cigarettes sold in India, was dealt a blow after quarterly tobacco product sales dropped unexpectedly, sending its shares lower even as net profit increased by a fifth, according to a Firstpost story. The company, India’s fifth-largest by market capitalisation and 30.8 per cent owned by British American Tobacco, generates about half of its revenue from cigarettes. Cigarette volumes fell by 2.5-3 per cent according to three analysts briefed by the company on its first-quarter results. They had expected flat volumes. "The crucial part for ITC would be to further ramp up its efforts towards reducing its dependence on the cigarette business,” said G. Chokkalingam, executive director and chief investment officer at Centrum Wealth Management, which recently sold some of its ITC shares. Enditem