ITC Q4 Results Review - Strong FMCG Performance; Stable Cigarette Growth: Dolat Capital
Results came in line with estimate.
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Dolat Capital Report
ITC Ltd.’s Q4 FY23 results came in line with our anticipation. Our analysis suggest that the cigarette business reported ~12% volume growth during Q4 FY23.
Fast moving consumer goods business reported 19.3% revenue growth with 440 basis points improvement in Ebit margin. ITC reported one of the best Ebit performance amongst peers during the quarter.
Continuous improvement in cigarette business is encouraging. The business reported 8.0% sales compound annual growth rate over last four-years and 4.1% volume CAGR over the same period. We expect volume and MS gain in the business in the near term.
We have marginally upward revised our FY24/25E earnings per share estimates at Rs 17.6/19.0 representing 1.5/2.1% revision.
Twin impact of cigarette business market share re-gain from illicit trades and lower duty increase in the budget would help the business to improve margins.
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