ITC, which sells seven of every 10 cigarettes in India, had a 36 per cent gain in profit in the first quarter of 2006 before a one-time expense, as demand for its tobacco and agriculture products increased. 

Net income excluding the one-time cost rose to 5.67 billion rupees, or US$ 124 million, from 4.17 billion rupees a year ago, the Calcutta company said in a statement Friday. Revenue climbed 28 per cent to 28.6 billion rupees.
ITC, which is 32 per cent owned by British American Tobacco, sells cigarettes through more than two million outlets. The company is set to take advantage of restrictions placed on overseas tobacco companies, including limits on local manufacturing, at a time when higher economic growth is spurring Indian smokers to shift to costlier brands.
Net income after the one-time expense in the three months to 31 March declined 26 per cent to 5.68 billion rupees. The year-earlier figure includes a one-time gain. Sales increased 28 per cent to 27.84 billion rupees. 
The company's cigarette sales increased 15 per cent, hotel revenue gained 45 per cent, paper sales rose 15.6 per cent and agriculture business surged 56 per cent in the quarter.
India restricts local production by overseas companies, including Altria Group's Philip Morris International, forcing them to import their best-selling brands, including Marlboro.
The health ministry's ban on tobacco advertising in 2004 and its proposal last August to ban the display and use of tobacco in movies also makes it difficult to promote new brands. (pi)