ITC Q2 Review - Delivers On Expectation; Competition Intensifies In Other Fmcg Businesses: Motilal Oswal

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Motilal Oswal Report.ITC Ltd.'s Q2 FY24 results were in line with our estimates. The cigarette business posted ~4% YoY volume growth in Q2 FY24 versus our estimate of +6%. With no material increase in the cigarette GST/National Calamities Duty, the volume growth outlook remains healthy. However, the near-term margin would remain under pressure due to cost inflation. ITC has posted only 8.3% revenue growth in the other fmcg business due to subdued demand. It also faces heightened competition from local and regional players like the other large fmcg companies, in the backdrop of commodity price deflation.The agri business, excluding wheat and rice exports, delivered a healthy performance driven by value-added agri and leaf tobacco. The paper segment was hit by demand issues, competition from China, lower pulp prices, and higher input costs. However, there were signs of revival towards the end of the quarter. The hotels segment reported a robust performance despite the flat occupancy YoY due to renovations and relatively smaller number of wedding dates. We retain our 'Buy' rating on ITC as we believe its earnings visibility remains better than that of peers. Our target price of Rs 535 is based on 28 times FY25E earnings per share..Click on the attachment to read the full report:.ITC Q2 Review - Mixed Bag; Sales Growth Should Improve From Q3 As Export Ban Comes Into Base: Yes Securities.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

ITC Q2 Review - Delivers On Expectation; Competition Intensifies In Other Fmcg Businesses: Motilal Oswal

Fmcg-others sales grew 8.3% YoY to Rs 52.9 billion. Ebit jumped 36.8% YoY to Rs 4.4 billion in Q2 FY24.

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