ITC Q2 net may rise 16.8% at Rs 2451 cr: Motilal Oswal

Motilal Oswal has come out with its second quarter (July-September) earnings estimates for the consumer sector. The brokerage house expects ITC to report a 12.1 percent growth quarter-on-quarter (growth of 16.8 percent year-on-year) in net profit at Rs 2451 crore.

Sales are expected to decrease by 3.9 percent Q-o-Q (up 13 percent Y-o-Y) to Rs 8884.7 crore, according to Motilal Oswal.

Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to rise by 4.6 percent Q-o-Q (up 13.6 percent Y-o-Y) to Rs 3429.5 crore.

We expect ITC to post 2.5-3 percent decline in cigarette volumes. Price hikes in the last three years, necessitated by excise duty increases, have kept cigarette volumes subdued.

We estimate net sales at INR 88.8 billion, up 13 percent, driven by Cigarettes and Paper (largely realisation). Hotels revenue should remain soft, as macros remain weak.

We expect EBITDA to grow 13.6 percent to INR 34.3 billion.

FMCG Others should post 15 percent topline growth, with positive segment EBIT of INR 200 million.

We build in a healthy 16.8 percent PAT growth to INR 24.5 billion.

The stock trades at 24.5x FY16E EPS of INR 14.9.

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