FMCG giant ITC, which is scheduled to declare its financial results for Q2 FY24 on October 19, is expected to post up to 10 per cent jump in its net profit for the September 2023 quarter. Cigarette sales, FMCG price hikes, and hotel demand will have led the profit growth.
Brokerage firm Kotak Institutional Equities expects ITC to post 8.4 per cent year-on-year jump in standalone profit to Rs 4,843 crore. It also expects revenue rising 4.6 per cent YoY to Rs 16,870 crore. ITC is also expected to register an Ebitda margin of 37 per cent.
According to a Moneycontrol report citing mean consensus of four brokerage estimates, ITC Ltd’s Q2FY24 net profit is likely to come in at Rs 4,889 crore for the July-September 2023 quarter. Its standalone revenue may grow 4.6 per cent YoY to Rs 17,216 crore. The company’s operating profit margins are likely to rise moderately, by 68 basis points YoY to 37 percent.
“We estimate 5 per cent YoY growth in cigarette volumes, translating into 10 per cent/8 per cent YoY growth in gross/net cigarette sales (versus 13 per cent/11 per cent gross/net growth in Q1). We expect cigarette EBIT growth of 8 per cent in line with revenue growth (akin to Q1),” Kotak Institutional Equities said.
Another brokerage house BOB Capital Markets said ITC is likely to log high-single-digit volume growth in cigarettes with strong double-digit growth and margin expansion in the FMCG segment.”
It added that hotels should continue to perform well led by higher occupancy and RevPAR, the brokerage said adding that the paper and paperboard business may perform well on both the growth and margin fronts, even as the revenue from the agri business may remain subdued.
BOB Capital Markets expects adjusted profit for ITC to jump 11.2 per cent YoY to Rs 5,138 crore. Sales are seen rising 3.9 per cent YoY to Rs 17,771.60. Margin is seen at 38.7 per cent against 38.9 per cent in June quarter and 34 per cent in the year-ago quarter.
Another brokerage firm Sharekhan in its report said ITC’s cigarette business revenue might rise 9 per cent YoY, aided by 5-6 per cent volume growth. The non-cigarette FMCG business is likely to grow 15 per cent YoY.
Sharekhan expects ITC’s adjusted PAT at Rs 4,793 crore, up 7.3 per cent. The company’s sales are likely to rise 1.2 per cent YoY to Rs 16,326 crore. JM Financial sees profit at Rs 4,847 crore, up 8.5 per cent.
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