ITC Q2 Results Tomorrow: Profit Could Increase 6-14%; Likely growth in cigarette volume at 7-8%

NEW DELHI: Expected to post a 6-14% increase in profits for the September quarter thanks to a similar increase in net sales. Volume growth is 7-8%.

The outlook for the hospitality division, the evolution of demand and prices in the cigarette segment and the performance of the agro and packaging divisions will be closely watched.

ICICIdirect said ITC could see a rapid recovery in cigarette volumes and other discretionary activity as out-of-home activity normalizes. The brokerage forecasted net profit of Rs.3,619.10 crore, up 12% year-on-year, and said consolidated revenue would grow 13.4% year-on-year. He also forecast a 9.4 percent growth in cigarette sales. “We expect cigarette volume growth of 7%. Hotel sales are estimated to have doubled from a low base. The FMCG and Paper businesses are expected to increase by 13.4% and 12.2%, respectively. We estimate agribusiness growth of 6.5%. percent on a relatively high basis. We estimate a 118 basis point improvement in operating margins to 35.1 percent, ”he said.

Axis Securities said underlying cigarette volumes for ITC would increase 8% year-on-year due to a 13% decline in volume growth in the base quarter. He estimated that after-tax profit would increase 6.6% year-on-year to Rs 3,445 crore, from Rs 3,232 crore. Revenue would increase by 5.4% year-on-year to Rs 12,626 crore, from Rs 11,977 crore. The EBITDA margin would fall 16 basis points year on year to 33.7% from 33.9. On a sequential basis, the margin could improve by 294 basis points, the brokerage said. “The FMCG segment will see modest growth of 5% on a high basis, hotels could experience a strong recovery supported by improved occupancy levels. helped by other revenues and overall operational performance, ”he added. HDFC Securities Institutional Research modeled 8 percent year-on-year growth in cigarette revenues, with volume growth of 8 percent year-on-year. Non-smoking activities are expected to grow by 11%. The brokerage has estimated a 33% year-over-year growth in FMCG trading revenue. He forecast a 14% growth in PAT to Rs 3,700 crore on a 12% increase in sales to Rs 13,420 crore. The EBITDA margin stood at 35.1%, up 117 basis points.

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