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Yes Securities Report
ITC Ltd.'s Q3 FY24 operating performance was below estimates while profit after tax was aided by higher other income and tax credit. Cigarette volumes were subdued largely due to base effect. Fmcg-others grew 7.6%, impacted by subdued demand, with Ebitda margin stable at 11% for three consecutive quarters. Trade restrictions on agri commodities continue to impact ITC's agri business.
Segment likely to see some benefit starting Q4 FY24 with expected commencement of export shipments of Nicotine and Nicotine derivative products.
Paperboards, paper and packaging segment continue to remain impacted by low priced Chinese supplies in global markets, muted domestic demand, surge in wood cost and high base effect.
Based on unchanged target multiple of ~26 times (three year/five year average forward multiple ~20 times), we arrive at a target price of Rs 500. Maintain 'Add'.
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