The company had reported a net profit of Rs 5,051.57 crore in the September quarter, the stock filing showed
Newly added high-growth businesses will create a future-ready portfolio
Resilient performance amid challenging operating environment
ITC is an Indian conglomerate with diverse business interests, spanning across Cigarettes, Branded Packaged Foods, Personal Care, hotels and Agri. ITC is well diversified players with Cigarette business being a cash cow which enables incubation of new high growth business. The recent quarterly earnings were in line expectations but inflationary pressure weighed on consumption and FMCG business. ITC also offers a decent dividend yield, which can help it outperform in the near term, given the macro headwinds and elevated market volatility. Moreover, post de-merger of the asset-heavy hotel business, the return profile of ITC is expected to improve substantially.
The proposed hike in GST for demerit goods has impacted several stocks tied to these industries. Meanwhile, insurance stocks saw positive movement amid expectations of tax cuts on insurance premiums.
Diversification drives top-line growth, but inflationary pressure hurts margins.
We remain positive on the long-term prospects of the business, given ITC’s healthy cash flow
There has been 20% increase in ITC May futures combined open interest and an uptick in OIPCR for the May series, indicating increased activity from put writers and expected upside.
Well-diversified business model with robust free cash flows
There is no strategic intent from BAT to be a minority shareholder of a hotel company in the Indian market, said BAT CEO Marroco
The CMD also spoke about the structure of the deal and the asset-acquisition strategy for the new entity, among others
ITC shares suffered a sharp decline as investors disliked the company's decision not to fully split its hotel business and retain 40 percent of the new entity. Market participants were put off because only 60 percent will be distributed to shareholders
The decision to not do a full split of ITC's newly carved hotel business came as a negative surprise for market participants, fueling a 4% slide in the stock on July 24.
Under the approved plan, the new entity would be majority-owned directly by the company's shareholders, holding approximately 60 percent of the stake, while ITC Limited would retain about 40 percent
About 1,718 shares advanced, 1,574 declined and 130 remained unchanged on July 20.
ITC is among the three corporates in the private sector in terms of contribution to exchequer over the years, the company said in its annual report