ITC, which will release its June quarter results on August 2, is likely to report double-digit YoY growth in profit with a healthy EBITDA. Revenue is expected to rise 8-9 percent YoY, backed by cigarette and FMCG segment, brokerages said.
The volume growth for cigarettes could be around 5-6 percent in Q1FY20 on lower base of 1.5 percent growth in Q1fy19. The volume growth in the March quarter was 7.5 percent.
"ITC is expected to witness sales growth of 8.5 percent YoY, mainly driven by robust growth from cigarettes and FMCG segment. The cigarettes segment is likely to witness around 6 percent volume growth on a low base," said ICICI direct, which also expects profit to rise by 12.8 percent YoY over a hike in prices of select cigarettes, and rapid improvement in FMCG operating margins.
The brokerage further expects the growth momentum to continue for the FMCG segment, where it sees a 13.9 percent rise in sales on the back of new launches and the premiumisation across categories.
Motilal Oswal also expects net sales to grow 9.4 percent YoY, and sees cigarette volume growth of 6 percent and EBIT growth of 10.7 percent YoY. "Overall, EBITDA is expected to grow 9.4 percent YoY," it said.
Key issues to watch out for would be trends in cigarette volumes, pricing action and resultant mix change, and demand outlook for other FMCG businesses.
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