ITC Profit Falls 20% as Margins Shrink
ITC, a major Indian cigarette maker, reported second-quarter profit down about 20%. Its margin shrank while revenue rose slightly. Several outlets report that higher prices dented demand, and cigarette volumes fell. The company's profit is closely watched by investors because cigarettes are a large part of its business.
Context
ITC is a large conglomerate best known for cigarettes, with hotels, packaged foods and paper businesses. Cigarettes carry heavy taxes in India, so price increases are a common way for makers to pass on costs, but they can also reduce sales.
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