But it said the underlying post-tax profit was higher at 16.9 per cent after excluding tax refunds and related interest income received last year.

Net profit at ITC jumped to Rs 427.87 crore in the quarter ended September, as cigarette revenue climbed nearly 3.5 per cent to touch Rs 2,284.28 crore driven by an improved product mix.

ITC’s second quarter net sales turnover surged to Rs 1,536.25 crore from Rs 1,470.3 crore in the same period last year.

For the half-year ended September, ITC said its net profit swelled to Rs 825.09 crore on net sales that expanded to Rs 2,965.1 crore. Its earnings per share for the quarter ended September stood at Rs 17.29.

Cigarette Sales

ITC said its cigarette business continued to operate in a "challenging environment". Like all cigarette makers in India, ITC is battling to keep sales by volume from falling in the wake of increased taxes aimed at discouraging smoking and restrictions on advertising tobacco products.

ITC has been resorting to innovative modes of packaging to drive cigarette sales in terms of volume.

ITC has been increasingly trying to reduce its dependence on cigarettes by branching out into the agri-business category, hotels, paperboard, packaged foods, clothes retailing and greeting cards.

ITC said second quarter revenue in the hotels segment grew over 40 per cent to Rs 56.62 crore because of improved occupancies and room realisations.

The firm said the e-choupal network was further ramped up to nearly 2,600 installations.

Agri-business revenue grew 33 per cent after adjusting for the once-off opportunity of non-basmati rice exports last year.

The tobacco giant said that despite difficult trading conditions coupled with the continuing oversupply position in the global leaf tobacco industry, the strengthening Indian rupee and the steep currency devaluation in competing countries, its leaf tobacco exports grew 15 per cent in volume terms.