ITC Q3 PAT seen up 13.7% at Rs 2332.3cr: Motilal Oswal

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26 Aug, 2025 12:21

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Motilal Oswal has come out with its October-December earnings estimates for the FMCG sector. The brokerage house expects ITC to report a 11.2 percent growth quarter-on-quarter (up 13.7 percent Y-o-Y) in net profit at Rs 2332.3 crore.

Sales of ITC are expected to increase by 7.9 percent Q-o-Q (up 10 percent Y-o-Y) to Rs 8483.3 crore, according to Motilal Oswal.

Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to rise by 8.2 percent Q-o-Q (up 14.3 percent Y-o-Y) to Rs 3266.1 crore.

Motilal Oswal on ITC:

We expect ITC to post 2 percent decline in cigarette volumes. While a recovery in cigarettes is underway vis-à-vis 1HFY14, we expect it to be gradual.

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Two consecutive years of 15 percent+ price hikes are impacting the RSFT (regular size filter tip) segment, while the 64mm segment continues to grow and gain traction (now 8% of volumes). ITC has recently taken 10-12 percent price hikes in mass RSFT brands (Wills, Gold Flake, etc).

We expect net sales to grow 10 percent to INR 84.8 billion, which reflects moderation across segments.

We estimate 140bp margin expansion to 38.5 percent, led by cigarettes and improving profitability in FMCG - Others.

Cigarette margins would be supported by 19 percent average price hike implemented post budget.

We expect FMCG - Others to post 15 percent revenue growth.

Higher tax rate should result in 13.7 percent PAT growth to INR 23.2 billion.

The stock trades at 25.4x FY15E EPS of INR12.7.

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