ITC Q3 preview: Hotels and FMCG may soar, but revenue and net profit may only climb by a single digit

ITC Q3 preview: Hotels and FMCG may soar, but revenue and net profit may only climb by a single digit

ITC Q3 preview: Hotels and FMCG may soar, but revenue and net profit may only climb by a single digit

About Rs 5,183 crore in net profit is anticipated for ITC from October to December, a 3% increase over the previous year.

According to BNP Paribas, the agribusiness can see a 20% annual increase in sales.

With support from its hotel division and FMCG business, FMCG and tobacco giant ITC is predicted to see a modest increase in net profit and mid-single digit annual rise in sales for the December quarter. On January 29, ITC will release its third-quarter financial results.

Based on the average estimate of six brokerages, the cigarette-to-hotel firm is anticipated to report a net profit of around Rs 5,183 crore, up 3% from the equivalent quarter last fiscal. It is anticipated that revenue would rise to Rs 17,425 crore.

Due to decreased rural demand throughout the quarter, other FMCG majors performed poorly, which coincides with this growth.

EBITDA is anticipated to increase by around 4% annually to approximately Rs 6,482 crore. On a quarterly basis, the EBITDA margin is anticipated to be steady at 36.5 percent. Earnings Before Interest, Taxes, Depreciation, and Amortization is referred to as EBITDA.

The amount of smokes will rise by three percent.

Cigarette volumes will rise by around 3% annually as a result of the stronger base and the cyclone's effects on South India's key markets.

According to Motilal Oswal, "the cigarette industry continues to grow volumes and gain a share of the market against softening competition from illicit trade."

Reduced RM prices will increase FMCG profits.

The brokerage anticipates a growth in gross margins as input prices drop. In every market and across all product lines, the category has produced robust growth.

Prabhudas Lilladher said, "FMCG will maintain margin expansion in a tough demand environment."

Lower rural demand, its effect on sales, and the fact that urban data has lagged for more than a year are the causes of the difficult demand environment. "Additionally, lower farm incomes as well as the emergence of smaller regional corporations are impacting larger, listed companies," said Elara Securities.

In contrast to the 8.3 percent sales rise in the September quarter, Kotak Institutional Equities predicts that the FMCG industry would witness revenue growth of about 7.5 percent year over year. The segment's EBIT margin will increase by 180 basis points annually to almost 9%.

One tenth of a percentage point is equal to one basis point.

lodging

With sales predicted to increase by 15% to 20% annually, the ITC Hotels category is predicted to have rapid development.

The delayed holiday and wedding seasons will probably cause the category to perform better. Kotak Institutional Equities predicts that EBIT margin would increase sequentially by 160 basis points to around 21%.

Paperboard Section of Agriculture

According to BNP Paribas, revenue growth in the agricultural sector might reach 20% annually, whilst the paperboard sector is expected to witness a 5% decrease. The base quarter for agribusiness showed the effects of import restrictions on wheat and rice. Brokerage companies said that the company's future depends on the paper and packaging industries as well as agriculture.