ITC Q4 results, dividend: Earnings preview, target prices & more

FMCG major ITC Ltd is all set to report its March quarter results on Thursday, with its board also likely to consider and approve final dividend for the financial year FY2024-25.  Analysts are expecting the FMCG major to report 3-6 per cent  growth in cigarette volumes. Segments such as FMCG-others and Paperboards, paper and packaging may stay under pressure, analysts said.

IIFL Securities expects ITC's consolidated sales to grow 9.5 per cent at Rs 18,581 crore, with Cigarettes and FMCG-others segments expected to report sales growth of 6 per cent and 4 per cent, respectively. Cigarette volume growth is seen at 5 per cent YoY.

Consolidated Ebit is expected to grow at 2.4 per cent, and Ebit for Cigarettes division at 5 per cent YoY. Ebit for FMCG-others and Paperboards, paper and packaging segment may remain under pressure, the brokerage said, as the brokerage sees net profit at Rs 5,017.20 crore, up 2.4 per cent. The growth figures for ITC are adjusted for hotels demerger, the broekarge said.

Sharekhan sees ITC's profit at Rs 4,944 crore in Q4 compared with Rs 5,022 crore in the corresponding quarter last year. It sees sales at Rs 17,078 crore, up 3 per cent over Rs 16,579 crore YoY. Operating profit margin is seen at 35.0 per cent, down 213 basis points over 37.2 per cent YoY. 

Axis Securities sees ITC Q4 profit at Rs 4,643 crore, down 7.5 per cent. It sees flattish revenue at Rs 16,547 crore. Ebitda is seen at Rs 5,809 crore while Ebitda margin is pegged at 35.1 per cent. 

"We expect 1 per cent revenue growth as we see the cigarettes segment to grow 6 per cent  YoY (3 per cent volume), FMCG to grow at 4 per cent YoY, papers to grow 5 per cent YoY and the agri segment at 3 per cent YoY," Axis Securities said.

Kotak Institutional Equities sees cigarette volume growth at 4.5 per cent YoY, translating into 7 per cent growth in gross cigarette sales. It sees margin for the cigarette segment falling 195 basis points YoY due to some inflation in leaf tobacco  and other inputs.
 
In the FMCG segment, it estimated revenue growth at 4.5 per cent YoY and EBIT margin at 6 per cent (down 300 bps yoy) impacted by RM inflation. Agri business growth is expected to be up 7 per cent YoY, while Paperboards growth is expected to  remain subdued at 3.7 per cent yoy due to tough operating conditions.

"Net-net,  adjusted for demerger of Hotels business, ITC's LFL gross sales/EBIT growth are expected to be up 6.5 per cent/down 0.5 per cent YoY," it said.  This brokerage sees Q4 profit falling 3.7 per cent YoY to Rs 4,836.70 crore. Revenue is seen at Rs 16,651.90 crore, 0.4 per cent.

MOFSL has a buy rating and a target of Rs 525 on the stock. Kotak has a target of Rs 500 on the stock. IIFL Securities finds the stock worth Rs 485.