ITC Q1 net profit likely to rise 16%
ITC Ltd, the diversified conglomerate, is set to declare its Q1 results today. The cigarette manufacturer is expected to see decent double digit growth in the net profit for the first quarter of FY24, while its revenue is likely to remain flat on a year-on-year (YoY) basis.
ITC Q1 net profit is expected to rise 16.7% on-year to ₹4,886 crore led by steady growth in cigarette and fast-moving consumer goods (FMCG) businesses, as per brokerage poll by Livemint.
The company's topline growth in Q1FY24 is likely to remain muted at 1.5% with the company reporting revenue at ₹17,548 crore, according to the average analysts' estimates.
ITC's cigarette business is likely to deliver volume growth of around 10% and see market share gains in the absence of competition from illicit trade.
The FMCG - Others segment has also delivered strong growth across markets and product lines, and as input prices decline, and analysts anticipate an expansion in margins too.
Meanwhile, paperboards, paper, and packaging are expected to remain flattish on a YoY basis.
Motilal Oswal Financial Services expects gross margin and EBITDA margin to expand 720 bps and 460 bps YoY, respectively, on a weak base.
Going ahead, ITC's outlook on the agri, paper & packaging and Hotel businesses will remain a key monitorable, while outlooks on Cigarettes and other FMCG demand will also be watched out for.
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HDFC Securities models 12% YoY growth in cigarette revenue, with volume growth of 10% YoY (4% 4-year CAGR). The non-cigarette business is expected to fall 9% YoY (impacted by agribusiness). The brokerage models 14% YoY growth in FMCG.
“We expect cigarette EBIT to grow by 13% YoY. We model FMCG EBIT margin at 8% versus 4.6% YoY. EBITDA to grow by 11% YoY," HDFC Securities said.
Yes Securities expects ITC's overall topline to be down by 2.3% YoY even while it expects 13.5% YoY revenue growth in cigarette business led by a volume growth of 11% YoY.
“Other-FMCG business is expected to grow at ~16% YoY. While decline in Agri Business (sitting on high base) and subdued PPP will drag ITC's overall revenue growth on a YoY basis. At the company level, we expect EBITDA margin to expand ~430 bps YoY to 37% led by gross margin improvement," Yes Securities said.
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Source: Live Mint
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Protesting BJP workers lock up Union minister in party office
BJP workers locked up Union minister Subhas Sarkar in their party office in West Bengal's Bankura on Tuesday, alleging that he was being "dictatorial" in running the district unit.
Sarkar, the MoS for Education and MP of Bankura, was chairing a meeting around 1 pm when a group of BJP workers shouting slogans marched into the party's district office and locked him up.
One of the protesters, Mohit Sharma, alleged that Sarkar was not giving importance to dedicated party workers and making people close to him members of the district committee.
"Some of us have been show-caused. We are protesting to save the party. This time, the BJP did not get any seat in Bankura Municipality because of his incompetence. BJP won two wards in the previous election. They could not field candidates in many seats in panchayat. It is a shame," he alleged.
Source: Live Mint
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ITC hotel spinoff at 10
NEW DELHI : The board of ITC Ltd on Monday approved a proposal to demerge the company’s hotel business and separately list it on the stock exchanges within 15 months.
As per the 10: 1 share entitlement ratio approved by the board, every person holding 10 ordinary shares of ITC will be entitled to one share of the demerged company, according to ITC.
The company clarified that ITC shareholders would hold around 60% direct stake in the new hotel entity (proportionate to their stake in ITC). The remaining 40% stake would remain with ITC.
ITC's hotel business includes ownership, licensing and management of several hotel properties, and providing services including accommodation, dining and banqueting services.
In addition, the board of directors of the cigarette-to-hotel conglomerate has also approved its investments in two firms including buying a 45% stake in International Travel House Ltd (ITHL) and 25% of Maharaja Heritage Resort. Maharaja Heritage is a joint venture between ITC and Jodhana Heritage. This entity operates hotels under WelcomHeritage brands and is in 36 locations currently.
ITHL, on the other hand, is a subsidiary of ITC and runs a corporate travel business including air ticketing, car rentals, destination management services, etc.
ITC has a majority 75% stake in ITHL. The remaining 25% of ITHL is owned by Russell Credit Ltd, which is also a wholly owned subsidiary of ITC.
The company said its hotel business has matured over the years, and will likely chart its own growth and operate as a separate listed entity in the industry. This, while, still being separate, will give it access to its larger institutional strengths, it said.
In the last fiscal FY23, at a consolidated level, the hotels business had a segment revenue of ₹2,689.12 crore and a gross revenue of about ₹557.31 crore.
It operates under six brands including Storii, Fortune and WelcomHeritage, and has 115 hotels in about 80 destinations in the country. The company has a marketing tie-up with American hospitality major Marriott International since 2019, which markets about 4,500 of its rooms in 14 hotels on its popular loyalty programme Marriott Bonvoy. It owns about 15 hotels and assets like a golf course in Gurugram.
Source: Live Mint
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ITC beats Street estimates with 17
NEW DELHI : ITC Ltd on Monday outperformed Street expectations with a 17.5% rise in standalone net profit for June quarter, helped by lower exp-enses. However, an ongoing ban on wheat export and a more recent ban on rice export hurt standalone revenue for the quarter that fell 7.2% to ₹16,995.49 crore from ₹18,320.16 crore a year ago.
The company, known for its Gold Flake cigarettes and Bingo chips, posted net profit of ₹4,902.74 crore for the quarter ended 30 June, up from ₹4,169.38 crore a year ago. The figures topped ₹4,817 crore estimate in a Bloomberg survey of 14 analysts.
Quarterly expenses fell 14.7% from year ago to ₹11,158.64 crore. Earnings before interest, taxes, depreciation and amortization grew 11% to ₹6,250 crore and margins expanded 6.82 percentage points. The global economy is facing a marked slowdown with high inflation and interest rates impacting economic activity, especially in advanced economies, ITC said.
“Against this backdrop, the Indian economy remains resilient, with buoyant tax collections, moderating inflation, credit growth uptick being some of the key positives amongst high frequency indicators," it said in a statement.
“Consumer demand is witnessing incipient signs of recovery. However, risks from the external consumer price inflation (especially food); commodity price volatility; El Nino impact on monsoons and agri output—would be the key monitorables in the near term," it said.
The company's cigarette business reported revenue growth of 13% to ₹7465.27 crore up from ₹6608.98 crore reported a year ago. Cigarette volumes grew between 9-10%, said Amnish Aggarwal, Head Of Research, Prabhudas Lilladher Pvt Ltd.
ITC's fast-moving consumer goods arm reported a 16% jump in quarterly revenues to ₹5,166 crores driven by demand in staples, biscuits, noodles, beverages, dairy, agarbatti and premium soaps.
Overall, input costs remained elevated compared to pre-pandemic levels, even as certain commodities witnessed moderation in prices on a high base of the previous year, the company said.
“The businesses continued to drive improvement in profitability through multi-pronged interventions viz. premiumisation, supply chain optimisation, judicious pricing actions, digital initiatives, strategic cost management and fiscal incentives," ITC said commenting on the FMCG segment performance.
However, the company's agriculture business reported a steep decline in quarterly revenue that was down 23.6% year-on-year to ₹5705.39. Restrictions imposed on wheat and rice exports in the backdrop of inflationary headwinds and food security concerns weigh on revenues, it said.
To be sure, ITC is the top exporter of wheat from India. “Geopolitical tensions have led to concerns over food security and food inflation globally. To ensure India remains food secure, government has had to impose restrictions on wheat and rice exports. These restrictions have resulted in lower business opportunities for the Agri Business during the quarter," the company said.
Meanwhile, the company's hotels business reported a 8.1% jump in quarterly revenue. Segment EBITDA margin was up 140 bps year-on-year to 33.9%, the company said. “Strong growth was witnessed in average room rates across properties, though occupancy moderated on a high base due to relatively fewer wedding dates during the quarter and pre-planned renovations," the company said.
During the quarter, ITC IndiVision Limited (IIVL), a wholly owned subsidiary of the company, completed trials and obtained statutory clearances for its pilot plant at its Mysuru facility for the manufacture and export of nicotine and nicotine derivative products conforming to US & EU pharmacopoeia standards, it said.
Source: Live Mint
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