ITC

** Indian conglomerate ITC ITC.NS reported a beat first-quarter profit view on Friday, led by higher sales of cigarettes and packaged food, particularly in rural areas

** Shares trading 0.7% higher, top gainer on FMCG index .NIFTYFMCG which is trading flat

CIGARETTE VOLUME STRONG; PROFIT IMPACTED BY COMPETITON

** Citi ("Buy", PT: 500 rupees) says it sees continued stead volume growth in cigarettes business but intensifying competition and high-cost leaf tobacco could keep margins under pressure in near-term

** Jefferies ("Buy", PT: 535 rupees) says while ITC's cigarette volumes rose to a multi-quarter high, margins continued to trend down

** Brokerage adds high-cost lead tobacco inventory, along with weak pricing growth due to stiff competition, remains a concern

** HSBC ("Buy", PT: 510 rupees) says the cigarette business remained steady during Q1, with other segments being muted

** Brokerage pares FY26-28 EPS estimates by 2-3%, factoring in lower margins in ITC's business segments

(Reporting by Kashish Tandon in Bengaluru)

((kashish.tandon[email protected]; Mobile: +91 8800437922))

Corrects to say profit fell, not rose, in paragraph 2

Aug 1 (Reuters) - Indian consumer goods conglomerate ITC ITC.NS reported a slightly better-than-expected first-quarter profit on Friday, buoyed by strong demand in its mainstay cigarettes and consumer goods business.

The company, which also sells instant noodles and other food products, said its standalone quarterly profit fell to 49.12 billion rupees ($561.68 million) for the quarter ended June 30 from 49.18 billion rupees a year earlier.

Analysts, on average, had expected 49.1 billion rupees, according to data compiled by LSEG.

($1 = 87.4520 Indian rupees)

(Reporting by Praveen Paramasivam, Ananta Agarwal and Chandini Monnappa in Bengaluru; Editing by Sonia Cheema)

(([email protected];))

Updates

** Consumer staple producers Colgate-Palmolive India COLG.NS and Dabur DABU.NS close 1% higher

** Indian government considering eliminating the 12% goods and services tax slab and reclassifying many items taxed at that bracket into the lower 5% bracket, NDTV reports

** Restructuring would target items such as toothpastes, umbrellas, sewing machines, kitchen utensils, report says

** Meanwhile, cigarette makers ITC ITC.NS and Godfrey Phillips GDFR.NS close 0.5% and 0.3% down, respectively

** NDTV reports separately that GST on cigarettes, carbonated drinks and high end cars may go up

** A proposal to replace compensation cess with health and green cess is under consideration, report adds

** YTD, COLG shares down ~9% while Dabur down 3.8%

(Reporting by Ananta Agarwal in Bengaluru)

(([email protected]))

The author is a Reuters Breakingviews columnist. The opinions expressed are her own. Updates to add graphic.

By Shritama Bose

MUMBAI, June 27 (Reuters Breakingviews) - What’s good for Indian tycoons is not always good for India. Dutch paint maker AkzoNobel AKZO.AS is selling a controlling stake in its local unit to the domestic JSW Group. The deal fits into its goal to focus its global portfolio amid a hypercompetitive market – but it also deepens India’s capital outflow woes.

The $12 billion maker of the Dulux paint brand on Friday said it would offload up to a 75% stake in Akzo Nobel India to privately held JSW Paints for $1.1 billion. It will retain full control over its local powder coatings business and research unit. The proceeds from the sale will be used to cut debt and buy back shares of the parent.

The transaction comes at an opportune time for AkzoNobel, which decided last October to concentrate on coatings in key geographies. It eases the company away from a market shaken up by the entry last year of local tycoon KM Birla’s Grasim Industries GRAS.NS, whose discounts to grab market share are hurting the margins of incumbents. It makes financial sense too, valuing Akzo Nobel India at 22 times EBITDA, more than twice the multiple at which the parent’s Amsterdam-listed shares trade.

Inspired by these sorts of punchy valuations, multinationals in India have been paring stakes in local units. British American Tobacco BATS.L sold shares in ITC ITC.NS to raise $1.5 billion last month, and U.S. appliance maker Whirlpool WHR.N plans to slash its stake in its Indian business to 20% from 51%. Less benign reasons underpin other transactions. Germany’s Siemens sold 90% in its loss-making wind turbine division to TPG amidst cutthroat competition. Swiss drugmaker Novartis is looking for a buyer for its Indian operations, which it says are relatively small compared to other geographies.

The slate of assets on offer bodes well for Indian founders looking to grow through acquisitions. But it undermines India’s vaunted position as a haven for global capital. Net foreign direct investment during the eight months to the end of November 2024 dropped to $500 million from $8.5 billion in the same period of 2023, per data from the Reserve Bank of India. Blame it on repatriations by global firms, which stood at $44.5 billion for the 12 months ended March 2024, having risen every year since March 2020.

Strong valuations aren’t exactly bad news. But if they wind up making India look less of a magnet for global capital, they’re not uniformly good news either.

Follow Shritama Bose on Linkedin and X.

CONTEXT NEWS

Dutch paint manufacturer AkzoNobel on June 27 said it had signed an agreement to sell up to a 75% stake in its Indian unit to privately held JSW Paints. The transaction is based on a total enterprise value of approximately 1.4 billion euros ($1.64 billion) and includes AkzoNobel’s liquid paints and coatings business in India.

The Amsterdam-listed company expects the net cash proceeds to be approximately 900 million euros, of which around 500 million euros will be used for deleveraging. AkzoNobel intends to launch a 400 million euro share buyback programme after the deal is closed.

“This divestment is a first step in the strategic portfolio review announced in October 2024, aimed at focusing the company’s capital and capabilities on leading positions in key global coatings markets,” AkzoNobel said.

Akzo Nobel India shares were up 8.2% as of 0852 GMT on June 27. AkzoNobel group shares were up 0.2%.

(Editing by George Hay; Production by Oliver Taslic)

((For previous columns by the author, Reuters customers can click on BOSE/[email protected]))

June 13 (Reuters) - ITC Ltd ITC.NS:

• ITC LTD - BUYS ENTIRE SHARE CAPITAL OF SRESTA NATURAL BIOPRODUCTS

• ITC LTD - ACQUISITION MADE FOR 4 BILLION RUPEES CASH-FREE DEBT-FREE

• ITC LTD - ADDITIONAL CONSIDERATION OF UP TO 725 MILLION RUPEES PAYABLE IN 24 MONTHS

Source text: ID:nNSE7Kzyn6

Further company coverage: ITC.NS

(([email protected];))

Adds details on increased deal size and final price and background

By Scott Murdoch

May 28 (Reuters) - British American Tobacco BATS.L has sold a $1.5 billion stake in Indian consumer goods company ITC ITC.NS at 413 Indian rupees per share, according to a term sheet seen by Reuters.

The company sold 313 million shares in ITC, representing 2.5% of ITC, according to the term sheet. This final amount exceeded its initial plan to sell up to 290 million shares in the deal, valued at approximately $1.4 billion.

The final sale price represented a 4.8% discount to ITC's closing price of 433.90 rupees on Tuesday.

Shares of ITC dropped nearly 3% to 421.70 rupees on Wednesday. The stock was the top loser on both Nifty 50 .NSEI and the FMCG index .NIFTYFMCG.

BAT will remain ITC's largest shareholder after the deal, according to LSEG data.

Goldman Sachs GS.N and Citigroup C.N led the deal, the term sheet showed.

The deal is the second major block trade in India this week after IndiGo INGL.NS co-founder Rakesh Gangwal sold a 5.7% stake in the low-cost carrier worth $1.36 billion.

BAT said it would increase its 2025 1.1 billion pounds ($1.49 billion) share buyback programme by 200 million pounds as a result of the deal, which is not expected to have any other impact on its annual outlook.

The London-listed cigarette maker had last year sold 436.9 million shares, or roughly 3.5% of ITC's outstanding shares, for about $2 billion in what was India's third-largest block deal ever.

The British firm in February forecast 1% growth in its annual revenue, citing tax headwinds in key markets such as Bangladesh and Australia.

($1 = 0.7401 pounds)

(Reporting by Scott Murdoch in Sydney; additional reporting Kashish Tandon, Prerna Bedi and Raechel Thankam Job in Bengaluru; Editing by Leroy Leo, Stephen Coates and Sherry Jacob-Phillips)

(([email protected];))

May 27 (Reuters) -

• BAT TO SELL $1.36 BILLION STAKE IN INDIAN TOBACCO MAKER ITC - BLOOMBERG NEWS

Source text: https://tinyurl.com/yenh4b8d

Further company coverage: BATS.L

(([email protected];))

** ITC ITC.NS reports higher Q4 profit on cigarettes business growth, rural market strength

** Stock up 1.2% to 431 rupees

** Of 37 analysts covering stock, at least seven cut PTs post results, three downgraded stock and five upgraded, per data compiled by LSEG

PRESSURES HAVE PEAKED, UPWARDS FROM HERE

** JP Morgan ("overweight"; PT 475 rupees): Q4 core profit in line with brokerage's estimate; better-than-expected cigarette sales volume growth

** Goldman Sachs ("buy"): Cigarette sales growth "steady"; margin pressure across cigarettes and FMCG "has peaked"

** BofA Securities ("buy", PT 470 rupees): Expects reversal of inflation trends in FMCG, cyclical downturn in paper segment over next 2-3 months to drive better earnings growth

** Investec ("buy", cuts PT to 493 rupees from 498 rupees): Expects ITC to get back to double digit earnings growth in FY26 with sequential improvement across segments

** Sees lower margins in FMCG, cigarettes, but risk reward is favorable

(Reporting by Hritam Mukherjee in Bengaluru)

(([email protected];))

May 22 (Reuters) - Indian consumer goods major ITC ITC.NS reported a rise in fourth-quarter profit on Thursday, benefiting from resilient rural demand.

The maker of "Yippee" instant noodles and "Gold Flake" cigarettes reported a standalone profit before tax and exceptional items of 64.17 billion Indian rupees ($746.48 million) for the quarter ended March 31, compared with 62.88 billion rupees a year earlier.

(Reporting by Ananta Agarwal and Shivani Tanna in Bengaluru; Editing by Shilpi Majumdar)

(([email protected]))

May 8 (Reuters) - India's consumer goods sector reported an 11% growth in value in the March quarter, as rural growth outpaced that in urban areas for the fifth straight quarter, market research firm NielsenIQ said on Thursday.

Rural areas - which account for just over a third of overall consumer goods sales - have become a bright spot for an industry that is struggling with higher living costs and slow wage growth in large cities.

"Rural markets continue to drive growth, whereas urban metros continue to see a shift toward E-commerce," Roosevelt Dsouza, head of customer success for consumer goods at NielsenIQ, said.

Although rural consumption growth slowed in the March quarter, with volumes rising 8.4% compared to 9.2% in the previous three months, it still outpaced urban demand, where growth decelerated to 2.6% from 4.2%.

Price increases also contributed to the overall value growth, with the cost of staples such as edible oil rising 5.6% during the quarter, compared with just 0.3% in the same period a year ago.

Low base, rural growth, and easing inflation are helping smaller players, which saw 17.8% growth in value, outpacing the broader FMCG market, the report said.

Indian consumer goods maker Marico MRCO.NS reported fourth-quarter profit above analysts' expectations, boosted by improving rural demand and price increases for its key packaged oil brands—underscoring the strength of non-urban markets.

The company also said it plans to expand its presence in villages across India.

Smaller manufacturers are driving consumption compared to larger players, whose volume growth has halved compared to the December quarter, NielsenIQ said.

Hindustan Unilever HLL.NS and Nestle India NEST.NS reported weaker fourth-quarter profits, with Hindustan Unilever cutting its margin forecast amid high commodity costs and sluggish urban demand.

Going ahead, NielsenIQ said revised tax slabs and a favorable monsoon forecast could further lift consumption in the coming quarters.

(Reporting by Ashish Chandra in Bengaluru; Editing by Sonia Cheema)

(([email protected]; +91 7982114624;))

** Shares of Aditya Birla Real Estate AITE.NS rise 2.3% to 2,002 rupees

** ITC ITC.NS signs agreement to acquire co's the pulp and paper business for up to 35 bln rupees ($409.5 mln)

** Brokerage Antique says the sale is positive for co as it will bring fresh capital, simplify structure, and boost high-growth areas

** With steady revenue and no long-term debt, the paper business lacks growth as it undertakes only maintenance capex, brokerage says

** Reiterates 'buy' rating on AITE with a Street-high PT of 3,448 rupees; says it remains positive on co's growth prospects in the medium to long term, stock is its top pick

** Avg rating is a "strong buy" and median PT is 2,992.50 rupees - LSEG

** AITE is down ~22% YTD, while ITC is down about 10%

($1 = 85.4770 Indian rupees)

(Reporting by Yagnoseni Das in Bengaluru)

(([email protected];))

March 31 (Reuters) - Indian conglomerate ITC ITC.NS said on Monday it would acquire the pulp and paper business of Aditya Birla Real Estate AITE.NS for up to 35 billion rupees ($409.7 million).

The acquisition will add 480,000 metric tonnes per year of capacity to ITC's paperboards and specialty papers business, the company said.

The deal comes as ITC's paperboards, paper, and packaging segment faces headwinds from low-priced Chinese and Indonesian supplies in global markets, weak domestic demand and an unprecedented surge in wood prices.

"The acquisition will strengthen the market standing of ITC's paperboards and specialty papers business and engender new opportunities in the domestic and international markets," said B Sumant, ITC executive director.

ITC, which already produces over 1 million metric tonnes per year, said the transaction is expected to close in about six months, subject to regulatory approvals including clearance from the Competition Commission of India and the transfer of land leases.

($1 = 85.4380 Indian rupees)

(Reporting by Yagnoseni Das in Bengaluru; Editing by Maju Samuel)

(([email protected];))

** Shares of consumer goods maker ITC ITC.NS down 2.52% to 430 rupees

** Co's mainstay cigarette business sees robust Q3 sales but margins contract by 270 bps on leaf tobacco inflation

** Core profit margin in FMCG segment contracts 240 bps on steep raw material inflation, despite volume growth of around 4%

** "The competitive intensity continues to remain high in certain categories such as noodles, snacks, biscuits" - Antique Stock Broking

** Paperboard segment performance impacted by low-priced Chinese supplies

** Stock rated 'buy' on avg by 35 analysts, with median PT at 530 rupees - LSEG

** Session's decline trims ITC's 12 month gain to about 5%

(Reporting by Ananta Agarwal in Bengaluru)

(([email protected]))

Feb 6 (Reuters) - Indian consumer goods major ITC ITC.NS reported quarterly profit above estimates on Thursday, benefiting from a revival in demand for consumer goods and cigarettes in the country's small towns and villages.

The 'Gold Flake' cigarette maker reported a profit of 56.38 billion rupees ($643.69 million) for the third quarter ended December 31, compared with 55.72 billion rupees a year earlier.

Analysts, on average, had projected a profit of 51.9 billion rupees, according to data compiled by LSEG.

($1 = 87.5890 Indian rupees)

(Reporting by Praveen Paramasivam in Chennai; Editing by Mrigank Dhaniwala)

(([email protected]; +91 867-525-3569;))

Jan 29 (Reuters) - Shares of ITC Hotels ITCT.NS fell 2.7% in debut trade on Wednesday, following its demerger from consumer goods firm ITC ITC.NS.

The stock slipped to 175 rupees on the National Stock Exchange, compared to a discovered price of 180 rupees determined during a pre-open trading session.

ITC ITC.NS had in July 2023 decided to spin off its hotel business into a separately listed firm to focus on its core cigarettes and food business.

(Reporting by Hritam Mukherjee in Bengaluru; Editing by Varun H K)

(([email protected]; X: @MukherjeeHritam;))

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Ujjaini Dutta

BENGALURU, Jan 10 (Reuters Breakingviews) - Smoking is about to look even less attractive. Shares of India’s ITC ITC.NS, the $65 billion conglomerate backed by British American Tobacco BATS.L, have barely moved since the company announced plans in July 2023 to spin off hotels despite a rally in the emerging market's equities. Now ITC faces the prospect of higher taxes on its core cigarettes business. For boss Sanjiv Puri, the challenges of unlocking value will mount as growth in the economy slows.

His decision to list the hospitality business, which generates about 4% of the group’s revenue, makes sense. Despite the slowdown in consumption, the Indian premium tourism market is growing exponentially. ITC Hotels, whose shares are due to start trading in February, is a luxury specialist with some 140 properties from New Delhi to Colombo.

Indian Hotels IHTL.NS, part of the Tata Group and a direct competitor, trades at 58 times forward earnings. That's more than twice the multiple of ITC, which will share any success because it retains a 40% stake in the unit. In the meantime, separating from its parent will make it easier for the capital-intensive hotel chain to attract investors because many institutional funds shun tobacco stocks.

The fact ITC shares are stuck, however, reflects a threat rather than an opportunity. Last month, a group of ministers mulling a rationalisation of a goods and services tax proposed adding a fifth, higher, slab of 35% for tobacco products as well as aerated beverages, news agency PTI reported, citing an official. The current rate for cigarettes, which generate nearly half of ITC sales, is 28%.

Sin products are an obvious target for officials who want to boost government revenue: ITC's cigarette sales have barely recovered to the level they were at prior to the initial implementation of a nationwide GST in 2017. Companies expected the sheer number of tax slabs to reduce over time, not increase. Worse, Indians are lighting up again in the black market because cigarettes there aren't subject to tax. Those products were harder to come by during the pandemic but supply is easing again.

Puri, in his capacity as president of the influential Confederation of Indian Industry, is calling for lower taxes and a simpler three-tier GST structure to boost consumption. That would help restore some puff to both ITC and the economy.

Follow @ujjainidutta_

CONTEXT NEWS

Shares of ITC Hotels, a unit spun off from Indian tobacco-led conglomerate ITC, are expected to start trading in February.

In December, a group of ministers on the country’s Goods and Services Tax council proposed hiking the tax on sin goods like cigarettes, aerated beverages and tobacco products to 35%, from the current 28%, news agency PTI reported, citing an official.

(Editing by Una Galani and Aditya Srivastav)

((For previous columns by the author, Reuters customers can click on DUTTA/
[email protected]))

Jan 6 (Reuters) - Shares of ITC ITC.NS fell about 5% on Monday in a special trading session to "discover" its price after accounting for the foods to tobacco conglomerate spinning off its hotels business into a separate listed entity.

ITC's stock settled at 455.6 rupees at the end of the hour-long pre-open trading session, compared to its unadjusted close of 481.6 rupees on Friday. Now, the stock's last closing will be deemed to have been at 455.6 rupees.

Compared to that adjusted close, ITC's stock was down 1.1% at 450.55 rupees as of 11:03 a.m. IST.

The ITC Hotels spin-off was effective Jan. 1.

ITC shareholders will get one ITC Hotels share for every 10 ITC shares, which values the ITC Hotels at 260 rupees based on the price adjustment.

ITC Hotels' shares are expected to start trading in February, with ITC holding a 40% stake and the rest open to public shareholders.

(Reporting by Nandan Mandayam in Bengaluru; Editing by Savio D'Souza)

(([email protected]; Mobile: +91 9591011727;))

Jan 3 (Reuters) - Gujarat Hotels Ltd GHTL.BO:

• ITC TRANSFERS 45.78% STAKE IN CO TO ITC HOTELS

Source text: ID:nBSE4qQT4y

Further company coverage: GHTL.BO

(([email protected];;))

Dec 30 (Reuters) - ITC Ltd ITC.NS:

• ITC HOTELS SHARES TO BE LISTED WITHIN 60 DAYS FROM DATE OF RECEIPT OF NCLT ORDER

• ITC AND ITC HOTELS TO EXECUTE A TRADEMARKS LICENSE AGREEMENT

Source text: ID:nBSEbJbqGq

Further company coverage: ITC.NS

(([email protected];;))

** Shares of cigarette-maker ITC ITC.NS climb 1.4% to 471 rupees, among top gainers on FMCG index .NIFTYFMCG which is up 0.8%

** India's finance minister on Saturday said there was no decision by the GST Council on changing rates on some items, including tobacco, against wider market expectations

** Earlier this month, a group of ministers recommended hiking tax on 'sin' goods such as tobacco to 35% from 28%, PTI reported, which the finance ministry was "speculative"

** ITC among 11 stocks on 15-member FMCG index rated "buy" or higher, rest rated "hold" - LSEG data

** Stock climbs 2% YTD vs FMCG index's 2% decline

(Reporting by Kashish Tandon in Bengaluru)

(([email protected]))

Dec 18 (Reuters) - ITC Ltd ITC.NS:

• ITC - ACQUISITION OF SHARES OF EIH LIMITED AND HLV LIMITED

• ITC LTD - ACQUIRES 2.44% OF EIH AND 0.53% OF HLV

Source text: ID:nBSE987kfX

Further company coverage: ITC.NS

(([email protected];))

Dec 17 (Reuters) - ITC Ltd ITC.NS:

• UPDATE ON DEMERGER OF HOTELS BUSINESS OF COMPANY

• RECEIVES NCLT ORDER SANCTIONING SCHEME OF ARRANGEMENT

• APPOINTED AND EFFECTIVE DATE OF SCHEME SET FOR 1ST JANUARY 2025

Source text: ID:nBSE5tXtkV

Further company coverage: ITC.NS

(([email protected];))

** Indian cigarette maker ITC ITC.NS up 2.3% at 471 rupees

** ITC among top gainers in Nifty 50 stocks .NSEI and fast moving consumer index .NIFTYFMCG

** No decision taken by Goods and Services Tax Council (GST), chaired by federal finance minister, on imposing 35% GST on cigarettes, country's junior finance minister says

** A group of ministers had proposed 35% GST on cigarettes from present 28%, as per media reports

** ITC up 1.9% YTD vs 3% fall in consumer stocks and ~14% gains in Nifty 50

(Reporting by Sethuraman NR and Nikunj Ohri)

(([email protected]; (+91 9945291420); Reuters Messaging: [email protected]))

Nov 29 (Reuters) - ITC Ltd ITC.NS:

• ACQUIRES ENTIRE SHARE CAPITAL OF GREENACRE HOLDINGS

• ACQUISITION OF SHARES OF GREENACRE HOLDINGS

• ACQUIRED ENTIRE SHARE CAPITAL OF GREENACRE HOLDINGS FOR 421 MILLION RUPEES

Source text: ID:nBSE4XXg0H

Further company coverage: ITC.NS

(([email protected];;))

** ITC ITC.NS rises as much as 4.3%, logging biggest intraday pct gain since July 23

** Stock set to snap seven day losing streak; top gainer on Nifty 50 index .NSEI, which is down 0.6%

** Gold Flake cigarettes maker's profit rose 3% to 50.78 bln rupees ($604 mln), but missed analysts' estimates of 51.14 bln rupees - LSEG

** Emkay Research says growth will likely see acceleration with agri business, which includes tobacco cultivation, back to healthy growth

** Adds co has strong competitive positioning in agri, but near-term margin stress calls for better execution of sales

** Jefferies says cigarette vol growth a relief vs misses seen in peers

** Stock rated "buy" on avg; median PT is 550 rupees vs current price of 492 rupees - LSEG

($1 = 84.0710 Indian rupees)

(Reporting by Ashna Teresa Britto in Bengaluru)

(([email protected] ; ( +91 8078332441))

Oct 24 (Reuters) - ITC Ltd ITC.NS:

• ITC - SUBDUED DEMAND CONDITIONS, UNUSUALLY HEAVY RAINS, HIGH FOOD INFLATION WITNESSED DURING QUARTER

• ITC - SHARP ESCALATION IN CERTAIN INPUT COSTS WITNESSED DURING QUARTER

Source text for Eikon: ID:nnAPN2BV5FQ

Further company coverage: ITC.NS

(([email protected];))

** Shares of Indian tobacco-to-hotels conglomerate ITC Ltd ITC.NS fall as much as 2.2% to 478.40 rupees

** Over 3 mln shares traded in 7 block deals in the price range of 479.80 - 482.65 rupees/shr - all at discount to co's last closing price of 488.90 rupees, LSEG data shows

** Stock on track to lose for third straight week, fell 1.6% so far this week

** More than 7.3 mln shares traded as of 10:27 a.m. IST, vs their 30-day moving avg of over 12.1 mln shares

** Mean rating of 35 analysts rating the stock is 'buy'; their median PT is 551.50 rupees - LSEG data

** ITC last down 1.7%; gained ~4% YTD so far

(Reporting by Meenakshi Maidas in Bengaluru)

(([email protected];))

Aug 8 (Reuters) - Indian consumer products' sales slowed sharply to a more-than-one-year low from April to June due to softening demand for personal care products and packaged wheat flour, especially in urban areas, market researcher NielsenIQ said on Thursday.

The overall sales volume growth slowed to 3.8% in the second quarter, compared with growth rates of 6.4% to 8.6% in the past four quarters, "largely due to macroeconomic headwinds," NielsenIQ said, without detailing the factors.

India's retail inflation hovered around 5% in the quarter, mostly due to high food prices, forcing consumers in the world's most populous country to cut back wherever possible to make ends meet.

The sales volume growth in rural areas slowed to 5.2%, from 7.6% in the previous quarter, but fared better than urban markets, where growth slowed even more sharply to 2.8% from 5.7%.

The growth in rural pockets outpaced urban areas for the first time in five quarters in the January-March period as consumer majors including Dove-soapmaker Hindustan Unilever HLL.NS trimmed prices to win back consumers.

In the coming quarters, packaged goods makers including rural-centric Dabur India DABU.NS and Emami EMAM.NS expect a further boost, helped by better monsoon and higher government spending, which usually translate to higher consumer spending.

"The timely arrival of monsoon, coupled with a rural-centric budget with a focus on rural infrastructure, agriculture and employment is a key positive for the sector," Dabur CEO Mohit Malhotra said on an earnings call earlier this month.

The likes of Maggi instant noodles-maker Nestle India NEST.NS and biscuits-manufacturer Britannia Industries BRIT.NS are also betting on rural recovery by making their products available at more stores.

For the June quarter, though, consumer goods makers have posted mixed results.

Urban-centric Nestle India reported its slowest growth in eight years as price increases drove consumers away, while more rural-focussed Hindustan Unilever reported higher earnings as price cuts boosted demand.

(Reporting by Praveen Paramasivam; Editing by Savio D'Souza)

(([email protected]; +91 867-525-3569;))

Adds ITC statement, shares, background

BENGALURU, Aug 1 (Reuters) - Indian tobacco-to-hotels conglomerate ITC ITC.NS missed first-quarter profit estimates on Thursday as higher expenses and competition from more affordable brands hurt.

The Sunfeast biscuits maker's profit edged up to 49.17 billion rupees ($587.4 million) for the quarter but missed analysts' estimate of 51.62 billion rupees, per LSEG data.

ITC, like peers Dove-soapmaker Hindustan Unilever HLL.NS and Maggi noodles-manufacturer Nestle India NEST.NS, faced stiff competition from local rivals that typically offer cheaper alternatives.

There was high "competitive intensity" from local and regional manufacturers in categories such as biscuits, snacks, noodles, education and stationery products, ITC said in an investor presentation.

Meanwhile, total expenses rose nearly 11%.

India's retail inflation rate hovered around 5% during April-June, mostly due to high food prices, forcing consumers in the world's most populous country to cut back wherever possible to make ends meet.

For ITC, overall revenue from operations increased 7.2% to 182.20 billion rupees, mainly helped by higher sales of cigarettes.

Other consumer goods makers have reported mixed results.

Hindustan Unilever posted higher earnings as product price cuts led to increased demand while Nestle India reported its slowest growth in eight years as price increases drove consumers away.

Shares in ITC closed marginally lower ahead of results. In the April-June quarter, the stock fell 0.8%, compared to a 5.2% gain in the Nifty consumer goods index .NIFTFMCG.

($1 = 83.7060 Indian rupees)

(Reporting by Praveen Paramasivam in Chennai and Ashna Teresa Britto in Bengaluru; Editing by Mrigank Dhaniwala and Nivedita Bhattacharjee)

(([email protected]; +91 867-525-3569;))

** Shares of cigarette maker ITC ITC.NS up as much as 3.8% to hit record high at 510.65 rupees; top gainer on the Nifty 50 .NSEI which is flat .BO

** Indian government keeps tobacco tax unchanged in Tuesday's union budget

** Jefferies says "no news is great news", hikes rating on stock to "Buy" from "Hold" earlier

** Sees move to provide tax stability to co over next 12-18 months, hikes TP to 585 rupees from 435 earlier

** While cigarette tax hikes are inevitable in medium-term, we believe they will be more moderate and less frequent - Morgan Stanley

** Sees stable tax environment as a relief from any near-term demand disruptions, retains "Overweight" with TP of 506 rupees

** Brokerage Macquarie echoes the sentiment, maintains "Outperform" and hikes TP by 5% to 560 rupees

** Analysts avg rating on stock is "Buy", median PT is 510.50 rupees - a 3.7% premium on last close, LSEG data

(Reporting by Manvi Pant in Bengaluru)

(([email protected]; +918447554364;))