Indian cigarette maker ITC is to enter the beverage market with a range of fruit juices and dairy drinks.

The conglomerate, which also operates in agri business, snack foods and hospitality, said in its annual shareholders meeting today that the move will further boost its portfolio amid a “challenging economic environment”. The “foray into the dairy and beverages segments will further enrich” the company, ITC chairman Shri Deveshwar said in a speech to investors.

According to Indian media, Deveshwar responded to questions after the speech by saying: “We want to grow in new areas... in areas of fruit juices, tea, coffee, chocolates and dairy products.”

The diversification comes after the Indian government last month increased excise duty on cigarettes - which account for half of ITC's sales - by as much as 72%. 

This week, Tata Global Beverages, the India-based tea, coffee and water brand owner, reported a fall in first-quarter profits despite a rise in sales.