ITC Q3 Results Review - Operating Performance Below Estimates: Yes Securities

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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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Yes Securities ITC Ltd Q3FY24.pdf

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Also Read: ITC Q3 Results Review - Miss On Cigarette Volume; Resilient FMCG Delivery: Motilal Oswal

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