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Motilal Oswal Report
ITC Ltd.'s revenue was higher than our expectations, led by outperformance in the agri and hotels businesses, but overall Ebitda and profit after tax was in-line. Among the internals, the positive surprise was the cigarette volume growth of ~13%.
We were expecting some disruption towards the end of Q3 FY22 on account of the Covid- 19 led restrictions beginning from the last fortnight of December 2021.
It is true that this growth was on a 7% volume decline. Nevertheless, ITC's average cigarette volume and Ebit growth over the last two-years remains between 2% and 3%.
With input costs led pressures weighing on fast moving consumer goods – others' margin YoY, Ebit diversification away from cigarettes will take time.
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