ITC Q4 results, dividend today. Will this Nifty stock justify recent market optimism?

ITC, the sixth most-valued firm on Dalal Street, is all set to report March quarter results today. The stock, which has rallied 29 per cent in 2023 so far is the second only to Tata Motors (33 per cent turn) among Nifty constituents in terms of returns this calendar. Can Thursday's quarterly results justify Street optimism? Hopes are high, as the cigarette division has been reporting solid volume growth of late while other segments too are seeing strong growth.

If we go by analysts, a double digit growth in profit on a 3-6 per cent rise in sales are all likely for ITC. Hotel business may do well on strong hotels bookings, cigarette business may log 13-14 per cent YoY volume growth, but agri business may clock a double digit de-growth. Paperboards, paper & packaging business is seen reporting flattish growth, analysts said.

Motilal Oswal pegged volume growth in cigarettes division at 13 per cent on yearly basis. It felt one should watch out for Hotels division's revenue growth and profitability and any commentary regarding the much-awaited demerger of businesses.

This brokerage expects profit at Rs 4,730 crore, up 12.8 per cent YoY. Sales are seen at Rs 16,050 crore, up 3.3 per cent.

ICICI Securities expects ITC's FMCG business to see strong growth of 19.1 per cent, led by higher growth in foods, discretionary and stationary segment. It sees 6.3 per cent revenue growth for ITC led by strong 15.9 per cent growth in cigarettes business.

"We estimate 13 per cent volume growth in cigarettes. Hotels segment is estimated to grow 77.8 per cent YoY, led by post-Covid pent up demand. The growth in paperboard segment is expected to moderate given raw material 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," it said.

This brokerage expects sees net profit at Rs 4,911.8 crore, up 17.2 per cent YoY. Nuvama estimated profit at Rs 4,856 crore, up 15.9 per cent. It sees sales rising 5.1 per cent YoY to Rs 16,324 crore.

Prabhudas Lilladher is the most optimistic lot. It sees profit rising 20.8 per cent YoY to Rs 5,060 crore on 11 per cent rise in sales at Rs 17,236 crore. This brokerage pegs cigarette volume growth at 14 per cent. It sees FMCG segment to post 17.5 per cent sales growth with YoY margin improvement. Paper business, it said, may grow 26 per cent, while it expects Hotel revenues to grow 66.3 per cent YoY.

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Also read: State Bank of India Q4 results: Profit surge likely in seasonally strong quarter, loan growth to lag peers