Cigarette-FMCG-to-hotel major ITC is expected to report a moderate decline in profit for March 2021 quarter as there was a lower tax cost in the year-ago period. The company will announce earnings on June 1.
The 10 days of base quarter (Q4FY20) had seen an impact of nationwide lockdown, so some segments like agri & paper business could report double digit growth in Q4FY21, but hotels segment is expected to continue to get impacted by COVID-19.
Analysts largely expect revenue growth in the range of 6-10 percent for the quarter compared to year-ago quarter, with cigarette business registering 6-9 percent volume growth and around 8 percent sales growth YoY, while FMCG segment is expected to continue to report double digit growth for the quarter given the expected continuity in demand for packaged foods business.
ICICI Direct expects revenue growth of 9.9 percent with cigarette business expected to grow 7.5 percent. "The company had taken a cigarette price hike in February 2020 while base quarter sales were impacted by the lockdown in the last 10 days of March 2020," said the brokerage which sees 1.2 percent decline in profit.
"We expect 9 percent YoY growth in cigarette volumes, 14 percent YoY growth in cigarette gross sales with 5 percent price-mix impact. We forecast 10 percent YoY growth in cigarette EBIT," Kotak Institutional Equities said.
In case of FMCG portfolio, Kotak expects sequential demand trends to hold, with some moderation in health & hygiene portfolio and recovery in discretionary segment. "We model 15.2 percent and 70 percent YoY growth in FMCG revenue and EBIT respectively. We model 220 bps YoY expansion in FMCG EBIT margin," said the brokerage.
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According to ICICI Direct, FMCG sales growth could be 13 percent, and there could be a 57 percent rise in EBIT.
"We expect 35 percent & 5 percent growth in agri & paper business, respectively, on the back of sales decline in base quarter. We expect hotels business to see 38.6 percent QoQ sales growth but it is still expected to be down 30 percent YoY," said ICICI Direct.
Kotak expects hotel segment revenue to decline at 35 percent YoY (versus 57 percent decline in December 2020 quarter).
ITC stock price gained 3.6 percent in the current year CY21, and 8 percent in the last one year.