ITC shares in focus ahead of Q2 results today

Shares of diversified conglomerate ITC Ltd will be in focus in Thursday's trade as the company will announce its numbers for the second quarter ended September 2024.

ITC Ltd is expected to see a steady second quarter with cigarette, hotels and agri businesses contributing positively, while paperboard remains weak.

Revenue from operations in the July-September 2024 period is likely to rise 7% year-on-year, according to an average estimate of four brokerages. Profit after tax, meanwhile, may rise by a marginal 3% year-on-year, the estimates showed.


EBITDA margins for the company are likely to decline up to 137 bps year-on-year, mainly due to the subdued performance paperboard business.

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Key Monitorables for investors include demand outlook on rural versus urban, competitive intensity, raw material trends, hotels and agri business outlook.

Kotak Equities estimates cigarette volume growth at 3% YoY (akin to 1Q), translating into 7% growth in net cigarette sales. EBIT growth for the segment is at 5% YoY, with 115 YoY decline in EBIT margin, due to some inflation in leaf tobacco and other inputs but partly mitigated through improved mix, cost management and calibrated pricing.

In the FMCG segment, the brokerage sees 6.5% YoY revenue growth with no major sequential price adjustments and (2) EBIT margin at 8.4%.

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"We expect 10% growth in hotels and 60 bps YoY increase in EBIT margin to 20%. Agri business growth is expected to be up 15% YoY. Paperboards growth is expected to decline 4% YoY due to tough operating conditions (subdued domestic demand conditions, weak export markets, weaker net realizations, and cheap Chinese supplies flooding the markets) and report an EBIT margin of 13.5%," it said.