ITC likely to report 6-8% growth in Q1 net; negative growth in cigarette volumes

NEW DELHI: FMCG major ITC is expected to post a modest 6-8 per cent YoY growth in net profit for the June quarter dented by a flat to marginal fall in cigarette volumes.

Brokerage Motilal Oswal Securities expect the cigarette maker to report a 6.2 per cent YoY rise in net profit at Rs 2,530 crore on 4 per cent YoY rise in net sales at Rs 10,460 crore. The brokerage believes that cigarette volumes for the company might have fallen by 2 per cent during the quarter.

“We expect cigarette EBIT to grow at 3.9 per cent YoY. We have factored in EBITDA growth of 2.5 per cent YoY to Rs 3,620 for the company,” the brokerage said.

ICICI Securities sees the company’s cigarette segment to see a revenue growth of 0.6 per cent YoY, while expecting nil growth cigarette volume for the quarter on year-on-year basis. Profit is seen rising 7.5 per cent at Rs 2,564 crore, the brokerage said.

Kotak Securities, meanwhile, expects the cigarettes business to report 1.5 per cent YoY growth in cigarette segment, even as it expects a 2 per cent decline in volume for the company, thanks to 3.5 per cent price and product mix-led growth. Among other businesses, it modeled a negative growth of 1 per cent, 2 per cent, and 2 per cent for FMCG, hotels segment. Agri-business is expected to report flat growth.