ITC advanced today following good buying support for the stock ahead of its results.

The scrip of the cigarette major was up by 1.10% at Rs 701.15 on the BSE in early-afternoon trades, but off its early high of Rs 706. A substantial volume of over 1.10 lakh  shares was recorded on the counter by 12:30 IST. The scrip has risen by 16.5% to the current level from Rs 602 on 25 March 2003.

The strong support for the scrip is on hopes of the company's impressive earnings growth  and a good dividend pay-out. ITC is scheduled to unveil its fourth quarter as well as full year (FY 2002-03) results today.

For Q4 ended 31 March 2003, a capitalmarket.com poll estimated ITC to record a net profit in the range of Rs 324-364 crore, a rise of 13-27%, while net sales are expected to grow by 4-10% in the range of Rs 1,437.50 crore and Rs 1,521 crore.

ITC has diversified into lifestyle and food ventures. There were rumours that the company is now planning to open up lifestyle franchises abroad. ITC has also forayed into other businesses like atta (flour), biscuits and confectionery. Recently, the company merged ITC Bhadrachalam Paperboards with itself.

Analysts said it is the core cigarette business that will lead ITC's growth in the near future. But the lifestyle and food segments are also considered to be of high potential.

The company has recently hiked the prices of certain cigarette brands. Meanwhile, despite the recent legislations against cigarette smoking, reports suggest that the demand for cigarettes has actually increased.

The government's legislations against cigarette advertisements and sponsorships of cultural and sports events by cigarette companies may even prove beneficial to ITC, some analysts believe, as the company used to spend inordinately high amounts on these activities.

Also, the legislations will restrict promotions made by foreign brands in India. Foreign cigarette makers were in fact looking at India as a major market for expansion of late.

The Union Budget for 2003-04 has also proved favourable to the cigarette sector (in an indirect way), by not going in for the customary hike in excise duty on tobacco products. ITC is a dominant player in the cigarette segment, with a 66% market share.

For the third quarter ended 31 December 2002, ITC recorded a 21.8% rise in net profit to Rs 323.51 crore (Rs 265.63 crore) on a 22.8% increase in net sales to Rs 1,467.6 crore (Rs 1,195.20 crore).

As on 31 March 2003, institutions and the public held 48% and 14% stake in ITC respectively.