ITC Q3 net profit seen up 10% at 1,259 cr

Cigarette major ITC is set to announce its results for the quarter ended December 2010. According to CNBC-TV18 estimates, its net profit is expected to go up by 10% at 1,259 crore as against Rs 1,144.2 crore on year-on-year basis.

Net sales are seen going up by 17% to Rs 5,381 crore from Rs 4,580 crore and earning before interest, depreciation, tax and amortisation (EBIDTA) margin is seen declining at 35.4% versus 36.9%.

For FY11, CNBC-TV18 expects ITC to show 14% growth in net sales to Rs 20,840 crore from Rs 18,153 crore. Net profit is expected to go up by 19% to Rs 4,871 crore versus Rs 4,061 crore and EBIDTA margin is seen improving at 34.4% versus 33.5%.

Factors to watch out for
-Expect flat volume growth in full-FY11
-Cigarette volumes dipped in H1FY11 due to steep 15% increase in excise duties
-Post the sharp tax hikes in February-10, cigarette volumes have de-grown during the 1H (1Q: -4%; 2Q: -1%)
-Improvement in volume trend can build-in around 2% YoY growth in Q3
-Initial confusion around pictorial warnings impacted cigarette production (for around 3 weeks), however no major impact on 3Q numbers expected
-Slight cut in margins due to higher A&P spend and increase in raw material prices