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Yes Securities Report
ITC Ltd. delivered a solid performance with another quarter of robust growth in cigarette volumes (~9%) which surpassed pre-Covid levels and now seems on growth trajectory, a steady 12% growth in fast moving consumer goods business despite a high base with sequential improvement in margins, hotels business turning around and above expected growth in both the agri (29% growth) and paperboards (32% growth) businesses on a high base.
We believe this sort of consistency across segments with some visible relief on the cigarette taxation front can drive a further re-rating on the valuations front.
We expect normalised growth in cigarette volumes going forward driven by stability in taxes, progressive claw back of illicit industry and better growth rates and margins in fmcg, in addition to margin improvement in cigarettes with positive operating leverage and a better mix.
Hotels business should improve steadily while paper business performance reinforces confidence in ITC's ability to enhance competitiveness.
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