ITC (Q3 FY14)

India Infoline News Service | Mumbai |

ITC surpassed our revenue expectations of Rs84bn by recording 13.1% yoy growth at Rs86.2bn during Q3 FY14 driven by strong growth in cigarette and other-FMCG business.

CMP Rs325, Target Rs384, Upside 18.3%

  • ITC’s Q3 FY14 revenues beat our expectations of Rs84bn by recording healthy 13.1% yoy growth at Rs86.2bn

  • Cigarette revenues grew by 12.5% yoy to Rs41.2bn while EBIT margins expanded by 180bps to 34.6%. Cigarette volumes declined by ~2% yoy

  • Other-FMCG revenues grew by 16.6% yoy to Rs20.1bn, registered Rs104mn profit at EBIT level against a loss of Rs240mn in Q3 FY13  

  • OPM expanded by 50bps to 36.9%. Net profit matched our expectations by recording 16.3% yoy growth at ~Rs24bn

  • 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 Rs384 

Result table (Standalone)
(Rs m)
Q3 FY14
Q3 FY13
% yoy
Q2 FY14
% qoq
Net sales
86,231
76,271
13.1
77,758
10.9
Material costs
(34,394)
(30,771)
11.8
(29,784)
15.5
Personnel costs
(4,008)
(3,460)
15.8
(3,699)
8.4
Other overheads
(16,024)
(14,293)
12.1
(13,384)
19.7
Operating profit
31,806
27,746
14.6
30,891
3.0
OPM (%)
36.9
36.4
51 bps
39.7
(284) bps
Depreciation
(2,259)
(2,052)
10.1
(2,209)
2.3
Interest
(91)
(252)
(63.7)
327
(128.0)
Other income
4,948
4,129
19.8
3,329
48.6
PBT
34,403
29,572
16.3
32,338
6.4
Tax
(10,550)
(9,053)
16.5
(10,033)
5.1
Effective tax rate (%)
(30.7)
(30.6)
-
(31.0)
-
Reported PAT
23,853
20,519
16.3
22,305
6.9
PAT margin (%)
27.7
26.9
76 bps
28.7
(102) bps
Ann. EPS (Rs)
12.0
10.4
15.4
11.3
6.7
Source: Company, India Infoline Research

Segment-wise net sales and EBIT break-up
Segments
Q3 FY14
(Rs mn)
Revenues
yoy (%)
EBIT
yoy (%)
Cigarettes
41,161
12.5
26,526
18.8
FMCG - Others
20,778
16.6
104
-
Hotels
3,154
1.9
622
12.1
Agri Business
17,864
9.5
2,054
19.
BSE 264.75 0.85 (0.32%)
NSE 264.60 0.35 (0.13%)

***Note: This is a NSE Chart

 

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