Regions

ITC Ltd is planning to invest US $4.4 billion (INR 260 billion) to expand its business interests into the hotel industry.  The decision came after the cigarette sales of Asia's second-largest cigarette manufacturer was at its lowest in four years.

ITC's chairman Yogesh Chander Deveshwar said that the company will be using its profits to fund the investment. On Thursday, the company revealed that their net income increased by 18% to INR 18.9 billion for the second quarter. However, the figure is still short of the INR 19 billion median that analysts have estimated. Deveshwar also said in a Bloomberg report that the company could have achieved more. "We would have been a company with much higher rate of growth if we could invest as much as we wanted to," Deveshwar said. 

A Kolkota-based analyst from Microsec Capital said the cigarette maker could utilize the investment in order to amass consumer good brands. "The hotel business is highly capital intensive and expansion may require a lot of funds," said analyst Naveen Vyas.