ITC Q1 results preview: Profit may rise 2-6%; cigarette volume growth seen at 2-3%

ITC Ltd is expected to report a muted set of quarterly results, as net profit is seen rising 2-6 per cent year-on-year (YoY) on 6-7 per cent jump in sales. The cigarette volume growth is seen in the 2-3 per cent range. Operating profit margin is seen falling up to 150 basis points on yearly basis. 

Sharekhan expects ITC to report a 2.2 per cent YoY rise in net profit at Rs 5,012 crore for the June quarter compared with Rs 4,903 crore in the same quarter last year. Net sales are seen rising 6.8 per cent YoY to Rs 16,907 crore from Rs 15,828 crore in the year-ago quarter. Operating margin is seen at 38 per cent, down 146 per cent YoY. 

"Cigarette business revenues are expected to grow by 7 per cent YoY, with volume growth at 2.5 per cent YoY, while non-cigarette FMCG business is expected to grow by 9 per cent YoY. Hotel business is expected to grow 9 per cent YoY; Paper business is expected to grow 2 per cent YoY, while agri-business is likely to post 2 per cent YoY decline," Sharekhan said. 

JM Financial sees ITC's Q1 profit at Rs 5,047.60 crore, up 3 per cent YoY. Revenue is seen at Rs 17,999 crore. The domestic brokerage sees Ebitda rising 2.5 per cent to Rs 6,408 crore, with Ebitda margin at 35.6 per cent, down 151 basis points.

MOFSL sees the profit figure at Rs 5,426.30 crore, up 6.3 per cent. It sees sales at Rs 18,362 crore.  

"We expect 3 per cent YoY volume growth in Cigarettes business in 1QFY25. Rural recovery not much visible in 1QFY25 but expectations of the government initiatives may drive consumption. Outlook on the agri and paper & packaging businesses are a key monitorable," MOFSL said.

Prabhudas Lilladher said ITC reported tepid volume growth in cigarettes and margin pressure in paper and Agri over the past few quarters. Margins, it said, are unlikely to improve given higher prices of leaf tobacco. 

"We expect margins in Agri and Paper to start improving from 3Q25 onwards and FMCG should sustain steady growth and margin expansion," it said.