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Systematix Research Report
ITC Ltd.'s revenues came in below expectations at 1.6% YoY with lower-than-expected cigarette volumes, paperboard and agribusiness revenue. Ebitda margins were lower than our expectations at 36.5%, down 181 basis points YoY due to inferior segment mix and weak profitability in paperboard and agribusiness.
Key highlights:
Cigarette volume/revenue/Ebit growth of -1%/3.6%/2.3% due to consolidation on a high base (15% volume growth in Q3 FY23) after a period of sustained growth momentum,
Fmcg grew 7.6% to Rs 52 billion (two-year compound annual growth rate of 12.8%) led by growth in staples, dairy, beverages, personal wash and homecare categories, with continued margin expansion of 100 basis points to 11%,
hotel business continued a strong rebound despite high base, grew 18.2% YoY and Ebit grew 57.1% YoY (margin up 676 bps YoY) driven by higher revenue per available room and strategic cost management initiatives,
agri business declined 2.2% and Ebit declined 13.3%,
paper segment revenue declined 9.7% due to low priced Chinese supplies, subdued demand and fall in pulp prices,
ITC Infotech posted revenue growth of 11% with Ebitda margins of 19.9% and
sharp rise in other income (up 30% YoY) and lower tax expenses (down 28% YoY) led to a significant beat on PAT (up 11% YoY) despite a miss on Ebitda (down 3% YoY).
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