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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.
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
| (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 |
