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Indian consumer goods maker ITC reported fourth-quarter profit below expectations on Thursday amid increasing competition from smaller rivals for shelf space, which dented demand.

Consumer goods makers including Hindustan Unilever and ITC have indicated that easing prices of some ingredients has encouraged regional rivals, which typically offer products at cheaper prices, to return to the fray for market share.

The fourth quarter saw "weak demand conditions and significant increase in competitive intensity from regional/local players," the "Fiama" soap-maker said in a presentation.

Revenue from ITC's fast-moving consumer goods segment, which houses its foods and personal care business but excludes cigarettes, rose 7.2%, compared to a 19.4% growth in the year-ago period.

Demand in its paperboards, paper and packaging business also fell due to competition with cheaper Chinese products, which was reflected in a 7% drop in revenue.

Meanwhile, its agri business saw a 13% drop in revenue, as the Indian government imposed trade restrictions on exports of agricultural commodities due to concerns over food security and inflation.

Coupled with this, higher prices of leaf tobacco prices and other input costs led to a 8.3% rise in raw material expenses.

ITC, home to "Sunfeast" biscuits and "Aashirvaad" flours, reported a profit of 50.20 billion rupees ($603.2 million) for the quarter ended March 31, down 1.3% from last year and missing analysts' estimate of 51.11 billion rupees as per LSEG data.

Overall revenue from operations rose edged up 1.4% to 177.53 billion rupees, compared to a 2.2% growth in the previous quarter.

Separately, the company approved a dividend of 7.50 rupees per share for the financial year 2024.

Earlier this year, British American Tobacco completed a $2 billion stake sale in ITC, removing a key overhang on the stock