ITC Q4 preview: Brokerages expect profit to jump 7-10%

ICICIdirect expects ITC to report net profit at Rs 3,226.5 crore up 10% year-on-year

FMCG major ITC will announce its March quarter earnings on May 13.


ICICIdirect expects ITC to report a net profit of Rs 3,226.5 crore, up 10 percent year-on-year (up 0.5 percent quarter-on-quarter). Net Sales are expected to increase 8.3 percent Y-o-Y (up 2.1 percent Q-o-Q) to Rs 11,463.3 crore.

Earnings before interest, tax, depreciation and amortization (EBITDA) are likely to rise 9.9 percent Y-o-Y (up 5.2 percent Q-o-Q) to Rs. 4,552.7 crore, it said.

Kotak Institutional Equities expects ITC (Standalone) to report net profit at Rs 3,160.4 crore up 7.8 percent year-on-year (down 1.5 percent quarter-on-quarter).

Net sales are expected to increase 7.4 percent Y-o-Y (up 1.1 percent Q-o-Q) to Rs. 11,254.7 crore while earnings before interest, tax, depreciation, and
amortization (EBITDA) are likely to rise by 9.2 percent Y-o-Y (up 4.1 percent Q-o-Q) to Rs. 4,407.7 crore.

According to Emkay Global Financial Services, ITC is expected to report its cigarette revenue growth of 9 percent (volume growth 6 percent) while cigarette EBIT growth is likely to remain at 9 percent. Overall, EBIT may grow by 11 percent, aided by higher growth in FMCG and Paper.

Research firm, Narnolia is of the view that adjusted sales of ITC are expected to grow by 17 percent YoY in Q4FY19 backed by 5 percent cigarette volume growth and growth in other FMCG business.

It expects the company’s cigarette, other FMCG and hotel business revenue to grow by 10 percent, 15 percent, and 15 percent, respectively, in Q4FY19.

ITC’s gross margin is expected to improve 19 bps YoY to 62.4 percent backed by lower crude and pricing action taken by the company in Cigarette segment.

The EBITDA margin is expected to improve 16 bps YoY to 39.3 percent on the back of improvement in gross margin, it added.

Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol advises users to check with certified experts before taking any investment decisions.

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