Q3FY23 Preview: ITC: Revenue seen at Rs 184,397 million, PAT at Rs 47,839 million

31 Jan 2023 , 11:21 AM

Result date: 3^rd February, 2023

Recommendation: Add

Target price: Rs 370

Analysts at IIFL Capital Services forecast cigarette volume growth of 12%. In terms of 3-year CAGR, the cigarette volume growth translates to a CAGR of 9.4% versus 9.3% in Q2FY23. In FMCG, analysts at IIFL Capital Services forecast 20% sales growth, which is slightly lower than the 21% clocked in the previous quarter, and an EBIT margin of 7.0%. Analysts at IIFL Capital Services expect the Agri-business to post 15% YoY decline in sales in Q3.

ITC could post 14% growth in EBITDA over the year-ago quarter; amid expansion in gross margin, better mix, operating leverage and cost savings.

Profit After Tax (PAT) could grow 18% over the year-ago quarter.

Important management insights to watch out for:

• Outlook on growth and profitability of Hotels business
• Consumption demand in rural and urban markets
• Outlook on the Agri, paper & packaging 
• Trends in input cost inflation and margin drivers thereof

Rs Million	December 2022 estimates	YoY change
Revenue	184,397	8.8%
EBITDA	64,030	14.4%
Profit After Tax	47,839	17.9%

Source: IIFL Research