ITC Q2 results today: Cigarette, paper biz key to watch

NEW DELHI: FMCG major ITC is all set to report its September quarter results on Friday.

Growth in cigarette volumes, operating profit margin of FMCG business, likely recovery in paper vertical and outlook on hotel and agri businesses will be key monitorables, say analysts.

Nirmal Bang Institutional Equities expects the cigarette maker to deliver 5.8 per cent revenue growth in Q2 FY19. The cigarette business is seen delivering 8 per cent growth in revenues, led by a 4-5 per cent jump in cigarette volumes. The numbers could be aided by low base as cigarette volume had fallen by around 6 per cent in the year-ago quarter.


“On the margin side, we expect cigarette margin to witness a decline whereas all other divisions, namely FMCG, hotel and paper divisions, should report better margins. On an overall basis, we expect Ebitda margin of 37.4 per cent as against 36.5 per cent in the base quarter,” Nirmal Bang note said.

Brokerage HDFC Securities is pencilling in 8 per cent YoY growth in cigarette revenues led by 4.5 per cent rise in cigarette volumes, and the rest by price hikes.

The non-cigarette business is expected to grow by 12 per cent with FMCG, hotel, agri and paper to register 15 per cent, 13 per cent, 9 per cent and 10 per cent, respectively.

PhillipCapital sees profit rising 11.56 per cent YoY at Rs 2,942.70 crore. Profit growth will be lower than Ebitda growth (13.2 per cent) due to lower other income and higher taxation, it said.