ITC Q1 Profit Seen up 10%, Cigarette Volume Likely at 2-4%

Source from:  Money Control 07/21/2016

ITC is likely to report net profit at Rs 2490.4 crore in April-June quarter, up 10 percent from Rs 2265.4 crore in corresponding quarter last fiscal. According to CNBC-TV18 poll, the FMCG major may see a growth of 9.8 percent in its Q1 total income at Rs 9425.3 crore against Rs 8587.7 crore in year-ago period.

Analysts polled by CNBC-TV18 feel EBITDA may rise 8.2 percent at Rs 3663.4 crore in Q1 compared to Rs 3385.9 crore while margins may slip 50 basis points (bps) at 38.9 percent versus 39.4 percent year-on-year. According to Prabhudas Lilladher, ITC's cigarette volume may see growth of 2-4 percent in Q1. It had taken a weighted average price hike of 5-6 percent in cigarettes this quarter. Cigarette volumes may be impacted by shut down of factories. ITC had shut factories for 15 days in April / May over non-clarity on pictorial warnings. Brokerages estimate it may hurt volume growth by 100 basis points (bps). However, numbers may look different due to Ind AS reporting while revenues may look higher on account of inclusion of excise duty. Margins may look very low optically due to higher revenue.

According to Prabhudas Lilladher, ITC's cigarette volume may see growth of 2-4 percent in Q1. It had taken a weighted average price hike of 5-6 percent in cigarettes this quarter. Cigarette volumes may be impacted by shut down of factories. ITC had shut factories for 15 days in April / May over non-clarity on pictorial warnings. Brokerages estimate it may hurt volume growth by 100 basis points (bps).

However, numbers may look different due to Ind AS reporting while revenues may look higher on account of inclusion of excise duty. Margins may look very low optically due to higher revenue. Enditem