Higher tobacco taxes burn cigarette makers' net revenue, volumes, profit in Q1
Major Indian cigarette manufacturers, including ITC, reported declines in net revenue and profit for the first quarter following a significant increase in government taxes. While gross revenue appeared to rise due to the tax pass-through, underlying sales volumes were negatively impacted by the new duty regime.
The government's steep increase in taxes on cigarettes and tobacco products has started weighing on the country's leading cigarette makers, with ITC, Godfrey Phillips India, and VST Industries reporting declines in net revenue, volumes and profitability in the April-June quarter, the first full quarter after the revised tax regime came into effect.
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