ITC shares drop 2% ahead of Q4 results, dividend; what stock analysts say

FMCG major ITC Ltd fell 2 per cent in Thursday's trade ahead of the Kolkata-based company's March quarter results. The stock fell 1.66 per cent to hit a low of Rs 425.75 on BSE. FMCG analysts are expecting the diversified conglomerate to report 3-6 per cent growth in cigarette volumes. Segments such as FMCG-others and Paperboards, Paper and Packaging may remain under pressure, stock analysts said.

Elara Secuities estimated ITC's adjusted net profit at Rs 4,840 crore against Rs 4,837.50 crore in the same quarter last year. It sees sales rising 7.1 per cent YoY for the quarter to Rs 16,847.40 crore against Rs 15,733.60 crore in the corresponding quarter last year. 

Sharekhan forecast ITC's net profit at Rs 4,944 crore. It estimated sales for ITC at Rs 17,078 crore. Operating profit margin for the company is seen at 35.0 per cent, down 213 basis points over 37.2 per cent YoY. 

Axis Securities anticipated ITC's Q4 profit at Rs 4,643 crore. Revenue for the company is pegged at Rs 16,547 crore. Ebitda is seen at Rs 5,809 crore while Ebitda margin is estimated at 35.1 per cent. 

On a standalone basis, YES Securities sees Q4 net profit at Rs 4,479.10 crore. It anticipated standalone sales rising 9.5 per cent YoY at Rs 17,177.10 crore. This brokerage sees ITC's cigarette business volume growth at 3.5 per cent. 

"Other-FMCG business, Agri business, and  PPP is expected to grow at 4.5 per cent, 14 per cent, and 4 epr cent YoY respectively. At the company  level, we expect Gross margin and Ebitda margin to decline by 360 bps and  140 bps YoY to 54 per cent and 32.2 per cent, respectively. While Ebitda and adjusted PAT are likely to grow by 4.9 per cent and 8.6 per cent YoY, respectively," it said.

Kotak Institutional Equities estimated cigarette volume growth at 4.5 per cent YoY, translating into 7 per cent growth in gross cigarette sales. It sees margin for the cigarette segment falling 195 basis points YoY due to some inflation in leaf tobacco  and other inputs.
 
In the FMCG segment, it estimated revenue growth at 4.5 per cent YoY and EBIT margin at 6 per cent (down 300 bps yoy) impacted by RM inflation. Agri business growth is expected to be up 7 per cent YoY, while Paperboards growth is expected to  remain subdued at 3.7 per cent yoy due to tough operating conditions.

"Net-net, adjusted for demerger of Hotels business, ITC's LFL gross sales/EBIT growth are expected to be up 6.5 per cent/down 0.5 per cent YoY," it said.  This brokerage sees Q4 profit falling 3.7 per cent YoY to Rs 4,836.70 crore. Revenue is seen at Rs 16,651.90 crore, 0.4 per cent.