ITC Q1 net profit seen up 18% at Rs 1,890 crore

Moneycontrol Bureau

Cigarettes to hotels to FMCG major ITC will report its first quarter results on Thursday. The company's earnings will be boosted by price hikes it took in cigarettes and strong growth in the other FMCG business. Analysts on average expect the India's largest cigarettes maker to report a net profit of Rs 1,890 crore, up 18 percent year-on-year, while revenue is seen up 17 percent to Rs 7,800 crore, according to a CNBC-TV18 poll. "We expect 18 percent YoY growth in ITC's cigarettes segment revenues (we model a 1.5 percent dip in volumes, 20 percent increase in prices); we estimate other FMCG business revenue growth at 22 percent," Kotak Institutional Equities said. ITC's EBITDA (earnings before interest, taxes, depreciation and amortization) is expected to rise 19 percent to Rs 2,750 crore and EBITDA margin is expected to rise 60 bps to 35.3 percent, according to the CNBC-TV18 poll. "With complete impact of increased excise duty passed on and increasing penetration of 64 mm cigarettes, we expect margins to sustain at 35.4 percent," says ICICIDirect.com, the retail broking arm of ICICI Securities. The brokerage expects ITC's FMCG revenues to rise 22 percent and agri business revenue to increase 12 percent. Revenue growth in paper as well as hotel segment is likely to be around 8 percent, it added. KEY THINGS TO WATCH - Volume growth in cigarettes
- Margins in the cigarettes and other FMCG business
- Growth and outlook in hotels segment. The growth across the sector has been sluggish over the last one year.
- New launches, especially in cigarettes and other FMCG segment.  STOCK WATCH ITC shares closed almost flat at Rs 375.80 on NSE on Wednesday. The stock had hit a record high of Rs 380 earlier in the session. Since March-end, the stock has gained 21.4 percent, outperforming the wider Nifty index, which is up 5.5 percent. Kotak Institutional has an "add" rating on ITC, while ICICIDirect recommends a "hold."