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Diversified conglomerate ITC Ltd is set to announce financial results for the fourth quarter ended March 31, 2023 on May 18. The company’s board is also likely to consider and recommend final dividend for FY23.
“……the meeting of the Board of Directors of the company is scheduled on 18/05/2023, inter alia, to consider and approve the audited standalone and consolidated financial results and consider and recommend final dividend for the financial year ended 31st March, 2023,” the company said in a notification to BSE recently.
According to industry experts, the company is likely to post a double digit growth in revenues in cigarette and FMCG businesses. Hotels business is also likely to witness a growth on the back of demand revival post Covid. However, the agri business division may witness a drop in sales.
Results outlook
In its preview note, HDFC Securities said it expects close to a 17 per cent year-on-year (YoY) growth in cigarette revenue, with a volume growth of 16 per cent YoY (5 per cent 4-year compound annual growth rate or CAGR). The non-cigarette business is expected to grow by 5 per cent YoY, although it may be impacted by agribusiness.
“We model 17 per cent YoY growth in FMCG. We expect cigarette EBIT to grow by 16 per cent YoY. We model FMCG EBIT margin at 7.3 per cent vs. 5.7 per cent YoY. EBITDA to grow by 20 per cent YoY,” it said in the note.
Continued improvement in cigarette volume and mix, FMCG business EBIT margin, a positive paper cycle, and the outlook on agri and hotel businesses are some of the key factors to monitor.
ICICI Securities has estimated over six per cent revenue growth for ITC, led by strong 16 per cent growth in cigarettes business. It estimated nearly 13 per cent volume growth in cigarettes. It also said that the FMCG business is expected to see over 19 per cent sales growth led by strong traction in foods, discretionary and stationary categories.
Hotels segment is estimated to grow 78 per cent led by post-Covid pent up demand.
“The growth in paperboard segment is expected to moderate given RM prices have declined and companies are taking price cuts accordingly. The segment is likely to grow 7.6 per cent in Q4. Agri business is likely to see 25.4 per cent sales decline on account of export restriction on wheat. We expect 340 basis points gross margin improvement and similar expansion in operating margins to 35.3 per cent. Net profit is expected to grow 17.2 per cent to ₹4,911.8 crore,” it said.
Axis Securities also expects the cigarette business to grow 16 per cent YoY (13 per cent volume) and FMCG to grow at 14 per cent (mid volume growth) primarily led by price growth. It expects a continued strong momentum in the hotels business. However, agri business is likely to decline on a higher base.
EBITDA margin is expected to expand 450 basis points on account of gross margin expansion, better mix, operating leverage and cost savings, it added.
The company’s scrip closed at ₹427.65, up by 0.87 per cent on the BSE on Wednesday.
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