ITC Q1 led by healthy cigarette EBIT growth, says JP Morgan
While most analysts expect the market to remain weak at least in the short term, Ramesh S. Damani, member, BSE, feels that the market may rally 8-10 per cent from the current levels. “Markets are likely to sustain the support levels. I would prefer to rem
ITC's June quarter sales were in-line with estimates, but profits surpassed expectations, global brokerage firm JP Morgan said.
India's largest cigarette maker said net sales jumped 15 per cent year-on-year to Rs 6,652 crore, ebitda jumped 23 per cent (yoy) to Rs 2,310 crore and net soared 20 per cent to Rs 1,602 crore for Q1FY13.
Cigarette and paper business registered healthy EBIT growth, while hotel and agri business had a more subdued performance. Other FMCG continues to register healthy sales growth and lower losses on a yoy basis, JP Morgan said in a note.
Here's JP Morgan's initial take on the performance across these verticals.
Cigarettes: Gross sales growth at 15 per cent yoy, better than estimates led by pricing growth. EBIT margins surprised positively, with margins expanding 140 basis points yoy driven by price increases. EBIT growth as a result was healthy at 20 per cent yoy for cigarettes.
Other FMCG saw healthy sales growth of 23 per cent yoy. EBIT losses were 2.6 per cent of sales, down 49 per cent yoy.
Hotels continued to report subdued performance given macro concerns. Revenue was flat yoy, EBIT declined -49 per cent yoy as margins fell to 11 per cent (against 22 per cent in the base quarter).
Agri business: Weaker than expected performance. Flat revenue growth yoy. However EBIT growth was 9 per cent owing to increase in EBIT margins by 90 basis points yoy.
Paper business: While revenue growth was 9 per cent yoy, EBIT growth was much stronger at 17 per cent yoy supported by 150 basis points yoy expansion in margins.