Tobacco-to-hotels conglomerate ITC reported better-than-expected quarterly profit due to its lucrative cigarettes segment even as revenue dropped markedly.

ITC’s net profit of Rs 2,933 crore for the quarter ended March 31, 2018, is an increase of 10% from a year ago—and marginally better than the Reuters estimate of Rs 2,845 crore. This is largely due to the increase in profit before tax from the cigarettes segment that stood at Rs 3,505.76 crore—an increase of near 7.5% from a year ago.

However, the sales of the Kolkata-headquartered company dropped 28% to Rs 10,706 crore as the cigarettes sales fell by 44% year-on-year. In its notes to accounts, ITC, however, says its comparable gross sales value for the fourth quarter was higher by 3.6%. Like in the case of other major consumer goods companies that have already reported their earnings for the quarter, ITC's revenues, too, appear subdued due to a change in accounting regulations post the Goods and Services Tax that came into effect from July 1, 2017.

ITC's hotel business recorded a marginal increase in revenue and a 12% increase in profit. ITC also saw an increase in revenue from its packaged goods businesses—excluding cigarrettes—that sells products such as Aashirvaad Atta and Sunfeast biscuits.

ITC’s share on the BSE was trading at Rs 285.95 on Wednesday afternoon, up nearly 1.47%. The S&P BSE Sensex was down 0.44% at 35,387.88 points at the same time.

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