(Reuters) – ITC missed second-quarter profit estimates on Thursday, as the Indian tobacco-to-hotels conglomerate incurred higher expenses amid a broader slowdown in urban markets.
The Gold Flake cigarettes and Sunfeast biscuits maker said its profit rose 3% to 50.78 billion rupees ($604.2 million) for the quarter ended Sept. 30.
Analysts, on average, had projected a profit of 51.14 billion rupees, according to data compiled by LSEG.
For the consumer goods industry, growth in urban pockets has lagged that in rural areas over the last three quarters, squeezing the bottomlines.
Higher costs of raw materials, including coffee, cocoa and crude oil have also weighed.
For ITC, total expenses soared 21%.
The consumer major’s overall revenue climbed 16% to 205.37 billion rupees for the quarter, with its consumer goods business, which makes up two-thirds of its revenue, growing 6%.
Peer Nestle India reported a drop in profit on higher ingredient prices, while soft drink makers Dabur India and Varun Beverages posted downbeat numbers, blaming higher-than-normal monsoon showers.
Shares of ITC closed nearly 2% lower ahead of results amid broader declines, lowering their gains so far this year to 2%.
($1 = 84.0490 Indian rupees)
(Reporting by Praveen Paramasivam; Editing by Mrigank Dhaniwala)
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