ITC Ltd, the largest cigarette maker in India, posted a larger-than-expected 22% rise in quarterly profit, aided by price increases, but its shares slipped 2% on concerns about moderating volume growth.

India's fast moving consumer good (FMCG) companies have been reeling under rising input costs and sluggish consumer demand as high inflation and interest rates gnawed away at consumer spending.

ITC, which has a market value of about of $30 billion, sixth-largest in India, said net profit rose to Rs 1,700 crore in the third quarter ended December 31 from Rs 1,389 crore a year earlier.

Net sales grew 14% to Rs 6,200 crore for the company, which sells brands such as Sunfeast biscuits, Bingo snacks, and Mint-o-Fresh candies. It also makes personal care products and runs hotels.

"Volume growth has not been as substantial as in the first half of the year. Some tapering down has happened there, but the substantial price hikes they have taken in the past couple of months have helped them," said Naveen Trivedi, analyst with brokerage PINC Research.

The company plans to hike prices gradually by 6-7% this year across its packaged food categories, Chitranjan Dar, chief executive of its food business told Reuters last week.

ITC's revenues from its FMCG business, which includes cigarettes, grew 17% while the hotels posted a marginal fall of 1%. The company's agri business grew 10% helped by the depreciation of the rupee.

ITC trades at 22.6 times its 12-month forward earnings, compared with 28.1 times for India's largest consumer firm Hindustan Unilever, 32.8 times for Nestle and 18.3 times for Godrej Consumer, according to Thomson Reuters Starmine Smart Estimate.

Shares of the company, that has risen 15% in 2011, handsomely outpacing the FMCG index that rose 9.5%.