ITC (Q1 FY14)

India Infoline News Service | Mumbai |

ITC reported modest 10% yoy increase in revenues at Rs73.4bn (below our expectations of Rs80bn) during Q1 FY14.

CMP Rs359, Target Rs398, Upside 10.9%
 
  • Revenues miss expectations, record modest ~10% yoy growth at Rs73.4bn. Mere 7% yoy growth in cigarettes as a result of delay in price hikes

  • Cigarette volumes declined by ~2% yoy on expected lines; EBIT margins expanded by 120bps to 32.6%. Other-FMCG witness a loss of Rs189mn at EBIT level due to expenses related to launch of deodorant range ‘Engage’

  • OPM expands by 220bps to 37.1% led by 220bps drop in overhead cost. Net profit marginally below our expectations at Rs18.9bn up by 18% yoy

  • We expect ITC to witness a revenue/PAT CAGR of 17%/20% respectively over FY13-15. Maintain BUY with a revised 9-mth price target of Rs398

Result table (Standalone)
(Rs m)
Q1 FY14
Q1 FY13
% yoy
Q4 FY13
% qoq
Net sales
73,385
66,522
10.3
81,803
(10.3)
Material costs
(28,690)
(25,761)
11.4
(35,478)
(19.1)
Personnel costs
(4,269)
(4,080)
4.6
(3,434)
24.3
Other overheads
(13,236)
(13,473)
(1.8)
(16,599)
(20.3)
Operating profit
27,191
23,209
17.2
26,292
3.4
OPM (%)
37.1
34.9
216 bps
32.1
491 bps
Depreciation
(2,153)
(1,948)
10.5
(2,067)
4.2
Interest
(170)
(138)
23.2
(243)
(30.2)
Other income
2,754
2,242
22.8
3,311
(16.8)
PBT
27,622
23,366
18.2
27,293
1.2
Tax
(8,709)
(7,344)
18.6
(8,014)
8.7
Effective tax rate (%)
(31.5)
(31.4)
-
(29.4)
-
Reported PAT
18,913
16,021
18.1
19,280
(1.9)
PAT margin (%)
25.8
24.1
169 bps
23.6
220 bps
Ann. EPS (Rs)
9.6
8.2
16.9
9.8
(1.9)
Source: Company, India Infoline Research

Segment-wise net sales and EBIT break-up
BSE 264.75 0.85 (0.32%)
NSE 264.60 0.35 (0.13%)

***Note: This is a NSE Chart

 

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