ITC Q1 results preview: Here’s what analysts expect from the FMCG major


Q1 preview: Shares of hit a new 52-week high of Rs 307.7 apiece on the BSE on Monday, up 1.5 per cent, ahead of the company’s April-June quarter (Q1FY23) result later today. The stock surpassed its previous high of Rs 305.9, touched on July 29, 2022.

Over the past one month, shares of the fast moving consumer goods (FMCG) company have surged 11 per cent as against a 8.5-per cent gain in the benchmark S&P BSE Sensex.

Analysts expect the company to report revenue growth of over 20 per cent over the previous year on the back of healthy cigarettes and hotels business. They, however, expect to report margin compression due to elevated raw material prices.

Here’s what key brokerages expect:

ICICI Securities

ITC is expected to post strong 23.3 per cent revenue growth led by 21.8 per cent growth in cigarettes business, 28 per cent growth in paperboard business, and 17.5 per cent growth in FMCG business. Agri business sales is expected to be flat given wheat export was banned during the quarter, and hotels business is expected to clock pre-Covid sales in Q1. We expect Ebitda to rise 20 per cent on year to Rs 4,791.4 crore, and net profit growth of 22.4 per cent to Rs 3,687.3 crore.


We expect net profit growth at 25.3 per cent YoY to Rs 3,775 crore, while sales could rise 21.2 per cent on year to Rs 14,811 crore. Cigarette business revenues are expected to increase by 23 per cent YoY, largely volume-led growth, while non-cigarette FMCG business is expected to grow by 16 per cent due to lower volume growth. Hotel business is expected to grow by 3.5x YoY aided by higher mobility and pent up demand, and agri and paper business are also expected to deliver over 20 per cent YoY growth.

“Gross margin is expected to decline by 38 basis points on year due to higher raw material prices, while operating profit margin is likely to improve marginally by 86 bps YoY aided by better operating efficiencies,” it said. It pegs OPM at 33.5 per cent.

Edelweiss Securities

We expect Revenue, Ebitda, and net profit to grow by 18.9 per cent, 19.3 per cent, and 26.2 per cent YoY, respectively. In the base year Q1FY22, we saw sales and Ebitda grow by 37.1 per cent and

50.8 per cent YoY. So on 2-years basis, we expect 63.0 per cent revenue growth and Ebitda to grow 80 per cen.

Segment wise, we expect cigarette volume to rise 28 per cent YoY on base of 32 per cent. We expect FMCG business to report 5 per cent YoY on base of 10.4 per cent, and we expect Hotels business to grow 140 per cent YoY on base of 463.5 per cent, Agri business to grow 55 per cent YoY on base of 9.2 per cent, Paperboard business should see 25.0 per cent YoY growth on 54.2 base. Overall, we expect Ebitda margins to grow 10bps YoY and dip 80bps QoQ.

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