ITC gains 2% ahead of Q3 earnings

Shares of ITC gained ahead of its December quarter earnings on Friday. The company is expected to report over 20 per cent jump in profit riding on corporate tax cuts.

The scrip hit day’s high of Rs 238.35 during the trade, up 1.92 per cent.

Brokerages expect cigarette volume for the FMCG player to grow at 3-4 per cent. Growth in cigarette sales is seen at 5-8 per cent.


Cigarette segment volume growth, Ebit margin at FMCG business, any recovery in paper business and the outlook on agri and hotel businesses will be keenly watched.

Emkay Global sees ITC reporting 24.3 per cent rise in profit at Rs 3,988.70 crore from Rs 3,209 crore in the same quarter last year. It sees sales for the cigarette maker rising 8.6 per cent to Rs 12,188 crore from Rs 11,227 crore in the year-ago period. Ebitda margin is seen improving to 39.50 per cent from 38.4 per cent in September quarter and 38.5 per cent in the year-ago quarter.

“We estimate cigarette volumes and sales growth of 3 per cent and 6 per cent with Ebit growth of 8 per cent. FMCG segment may grow 6 per cent, with EBIT improving by 43 per cent. We estimate other divisions to record sales and Ebit growth of 12 per cent,” Emkay said.

IIFL Securities forecasts cigarette volume growth at 3.5 per cent, higher than 2.5 per cent reported in the previous quarter. It projects sales growth at 6 per cent, similar to the last two quarters.

“Cigarette Ebit growth would accelerate to 9 per cent, as the proportion of higher-cost leaf tobacco reduces, and that of indigenised capsule-filters increases. At an overall level, we forecast sales, Ebitda and PBT growth at 8 per cent, 10.9 per cent and 8.6 per cent, respectively. Ebitda growth is boosted by a favourable base in the FMCG and hotel segments. PAT growth at 20.7 per cent would be boosted by corporate tax cut,” it said.

The shares of the company closed 0.60 per cent higher at Rs 235.25 on BSE.