ITC Q4 Results Review - Near Term Growth Triggers Missing: Dolat Capital

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Dolat Capital Report

ITC Ltd.'s Q4 FY24 results came in-line. Our analysis suggests that cigarette business reported ~3% volume growth - below our estimate.

FMCG business reported 7.2% revenue growth with 110 bps decline in Ebit margin. FMCG business witnessed competitive intensity from local players.

Cigarette business is facing consolidation of volumes on a high base. The business reported 11.1% sales compound annual growth rate and 8% volume CAGR over last four years. We expect near term volume and market share gain in this business.

We have downward revised our FY25/26E EPS estimates by 4.9/4.4% at Rs 17.0/18.9 to factor in Q4 performance and increased pressure in cigarette and paper business.

Given recent run-up in stock price, we maintain ‘Reduce’ rating with SOTP based target price of Rs 443 . Buy on dips.

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Dolat Capital ITC Q4FY24 Result Update.pdf

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Also Read: ITC Q4 Results Review - Marginal Miss On Topline; Maintain Buy: Axis Securities

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