India's ITC Q3 net up 8.4 pct, shares fall 1 pct

MUMBAI, Jan 19 (Reuters) - India's top cigarette maker, ITC
Ltd (ITC.BO), on Monday matched market expectations with an 8.4
percent rise in quarterly profit, but its revenue growth
disappointed and sent its shares down 1 percent.

ITC, 31.7 percent owned by British American Tobacco
(BATS.L), said revenues and profits were hit by a slowdown in
its hotels business as corporate travel fell in the wake of a
slowing economy and militant attacks in Mumbai in November.

The company said net profit rose to 9 billion rupees
($185.2 million) in its fiscal third quarter ended Dec. 31 from
8.3 billion a year earlier, while gross revenue rose 8 percent
to 59.2 billion rupees from 54.8 billion.

"Its profits were more or less in line with what we had
expected but we expected the topline to grow more, especially
the agri business," said Aashish Ubganlawar, analyst with
brokerage Sharekhan.

ITC said profit from its hotels fell 34 percent from year
ago and revenue dropped 14 percent as it cut room rates in the
wake of poor occupancy.

"It was much more than what we expected," Ubganlawar said.
The brokerage had estimated net profit to rise 8.8 percent and
sales to climb more than 16 percent.

ITC said higher prices from its filter cigarettes helped
drive profits even as a ban on smoking in public places
curtailed sales. Cigarettes contributed about 66 percent of
gross revenue.

High commodity prices and store rentals, costs involved in
building its personal care portfolio and investments on
expanding its distribution network also put pressure on its
profitability, the company said.

In the agri segment, revenues fell 6 percent due to lower
soya volumes, while sales of branded packaged foods were
modest, it said.

"The spillover inflationary impact of input commodities
along with the high fuel prices significantly impacted margins
during the quarter," the company said.

Shares in ITC, which has market value of $13.3 billion,
ended down 1 percent at 170.55 rupees in a flat Mumbai market.
The stock had fallen 18.4 percent in 2008, when the main index
lost more than half its value.
($1=48.6 rupees)
(Reporting by Janaki Krishnan; Editing by Ranjit Gangadharan)