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ITC Ltd, India’s largest cigarette maker, on Tuesday reported a 1.3% drop in its fiscal fourth-quarter profit because of higher tax outgo.

Net profit fell to 3,748.41 crore from 3,797.08 crore a year earlier, the company said in a filing to the stock exchanges on Tuesday. Revenue from operations at the maker of Bingo chips and Gold Flake cigarettes rose 24% from a year ago to 14,156.96 crore. A Bloomberg survey of 15 analysts estimated the company to report a net profit of 3,778 crore, while 12 analysts estimated revenue of 12,085.90 crore. ITC said it isn’t facing any material supply-chain bottlenecks because of the state-specific lockdowns, but it “continues to monitor the developments closely".

“While the constraints in the number of operating outlets and limited hours of operation are posing challenges at the front-end, there are no material supply-chain bottlenecks. Recent learnings in dealing with the pandemic, spanning sales and distribution, supply-chain operations, innovation and product development, are being leveraged in this regard. The company continues to monitor the developments closely and is well geared to respond with agility to the evolving situation while managing risks associated with the dynamic environment. Cost-reduction measures remain firmly in focus," the company said.

During the March quarter, the company’s cigarettes business grew by 14.2% to 5,859.60 crore. Volumes during the quarter inched towards pre-covid levels. “The company continued recovery in the cigarettes business, with the progressive easing of restrictions and improved mobility; volumes touched nearly pre-covid levels towards the close of the year," it added.

Cigarette volumes were in line with street estimates, said Abneesh Roy, executive vice-president, Edelweiss Securities. The company’s FMCG-others business, which comprises personal care products, packaged foods and frozen food brands, recorded a 15.8% rise in quarterly revenue to 3,687.50 crore. It sells brands such as Savlon soaps, Bingo chips and Sunfeast biscuits.

Demand during the year was driven by a surge in sales of staples, convenience foods and health and hygiene products in the first half of the year and strong recovery in the discretionary and out-of-home portfolio in the latter half, the company said.

Analysts at ICICI Securities said that ITC witnessed full recovery in cigarettes and paperboard businesses in the March quarter of FY21.

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