Mumbai, May 25: India's leading cigarette maker with presence in FMCG and agri-business, ITC Ltd reported better than expected 26% on-year growth in its net profit at Rs 16.14 billion for the Jan-Mar quarter of fiscal 2011-12 as compared to Rs 12.8 billion in a year-ago period.

Following tax hike in Budget ITC had to hike cigarette prices by 11%, affecting sales. However, strong growth in food and agri-business reduced the impact.

ITC, 25.4% owned by British American Tobacco Plc, reported other income of Rs 2.07 billion in Q4, compared to Rs 1.13 billion in a year ago period.

The company's net sales grew 17.5% on-year to Rs68.6 billion. Agri-business division, with over 20% revenue from exports of food items, sales grew 31% from the same period a year ago as a depereciating rupee bolstered earnings.

ITC's FMCG grew 24% on-year.

Experts are of opinion that ITC have to hike cigarette prices by another 8% in 2012.

Shares of ITC closed at Rs 231.75, down 0.75 % on Friday on BSE, when the general index Sensex dropped 0.03%.