Cigarettes still drive ITC growth

Though the statutory warning goes, “Cigarette smoking is injurious for health”, for ITC - the “market leader” in cigarettes in India, it is that segment of business which contributes to both topline and bottomline growth in a major way, notwithstanding its interests in hotels, branded-apparel, personal-care products, incense sticks, agri-business and paperboards.

For the quarter ending December 31, 2012, cigarette sales, net of excise duty, at Rs 3,657 crore accounted for about 47 per cent of its total revenues. The contribution to operating income was even higher – Rs 2,233 crore out of Rs 2,666 crore, or 83.75 per cent

For the nine month period ending December 2012, cigarette sales contributed Rs 10,346 crore out of net revenues of Rs 21,425 crore, about 48.28 per cent. The figures
for the corresponding period ending December 2011 were Rs 9,074 crore, Rs 17,937 crore and 50.58 per cent, respectively.

From an operating income standpoint, the segment contributed 81.79 per cent during the nine months ending December 2012 at Rs 6,213 crore out of Rs 7,596 crore. This was up from 79.87 per cent for the nine months ending December 2011 (Rs 5,149 crore out of Rs 6,446 crore).

The government’s tobacco promotion body, Tobacco Board, has put India’s export of cigarettes at Rs 154 crore for the period April to September 2012, up from Rs 141 crore during the same period in 2011.

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