ITC Q3 results, dividend today; here's earnings preview

FMCG giant ITC Ltd is in focus on Thursday ahead of its December quarter results. The board members of the Kolkata-based company will also consider and approve interim dividend for FY25 today. Analysts are expecting the cigarette maker to report a single digit rise in sales and up to 12 per cent drop in profit for the quarter, thanks to higher other income and lower tax rate (17 per cent) in the year-ago quarter. Cigarette volumes are expected to grow at 3-4 per cent year-on-year (YoY) for the quarter.

Nuvama expects profit for ITC to fall 11.4 per cent YoY to Rs 4,942 crore against Rs 5,578 crore YoY. Sales are seen rising 8 per cent YoY to 17,794 crore against 16,483 crore YoY. Ebitda margin is seen contracting to 34.2 per cent against 36.5 per cent YoY. Cigarette volume is seen growing 3.5 per cent YoY. The segment's margin may compress slightly due to raw material inflation, the domestic brokerage said.

In the FMCG segment, Nuvama sees 3 per cent YoY growth in sales and a fall in Ebitda margins due to sharp RM inflation in palm oil, maida and negative pricing in notebooks. ITC has not undertaken short-term measures such as cutting advertising and promotion.

Agri sales are likely to grow 20 per cent YoY due to higher tobacco sales while profit may expand 12 per cent. The paper business is expected to see 2 per cent YoY sales growth, but 22 per cent YoY dip in profits due to lack of operating leverage and high competition from imports.

Elara Securities sees ITC's profit at Rs 5,259 crore, down 5.6 per cent. It sees revenue at Rs 17,603 crore, up 6.8 per cent.

ITC's hotel business ITC Hotels became a separate entity effective from January 1, 2025. 

"ITC's revenue is likely to grow 11 per cent driven by hotels and the agri business. Cigarette revenue and EBIT may grow 6 per cent each, driven by 3 per cent volume growth. FMCG business to report 5 per cent growth, while hotels should report strong 12 per cent revenue growth. The agri business should report strong 47 per cent growth in revenue while profitability would be muted due to rise in commodity prices. Paper performance could be muted," Antique Stock Broking said.

This brokerage sees ITC's adjusted profit at Rs 5,118 crore and sales at Rs 18,366 crore.