ITC Q4 Results Review - Budget, Cigarette Volumes Key To Returns: Prabhudas Lilladher

"NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Prabhudas Lilladher Report.ITC Ltd.'s Ebitda de-grew by 0.8% on ~2.1% volume growth and 160 basis points YoY and 50 bps QoQ margin decline in cigarettes due to higher leaf tobacco prices and only calibrated price increases and pricing and input cost inflation in paper business. FMCG Ebitda margins of 11.6% (15% Ebit de-growth ex of PLI gains in Q4 FY23) whereas 33.8% Ebit growth in hotels have been positive..Demand scenario remains mixed with mass segment under pressure across cigarettes and FMCG. We expect ~4% cigarette volume growth in FY25/26 in a steady state while FMCG will continue to expand margins by ~80-100bps annually. Although hotels have, a high, base, strong demand will continue to drive growth. We expect paper margins to improve post Q2 only given high base in Q1 and tough operating environment. Agri business margins will expand in H2 FY25 only due to high leaf tobacco prices..We are largely retaining our estimates and estimate 7.3% EPS CAGR over FY24-26. ITC trades at 26 times FY26 EPS with return on equity/return on capital employed of 31.1/41.2% and ~75%+ dividend payout. We assign SOTP based target price of Rs 491 (Rs 488 earlier) as we roll forward to FY26. We expect returns to be driven by cigarette volume numbers and budget outcome in July. Retain Accumulate..Click on the attachment to read the full report:.ITC Q4 Results Review - Steady Core Business Performance: Motilal Oswal.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner."

ITC Q4 Results Review - Budget, Cigarette Volumes Key To Returns: Prabhudas Lilladher

Paper and agri margins outlook tepid in H1, hotel demerger likely by CY24 end

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ITC Q4 Results Review - Budget, Cigarette Volumes Key To Returns: Prabhudas Lilladher

Paper and agri margins outlook tepid in H1, hotel demerger likely by CY24 end

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