ITC Q1 Results Today: Cigarette volumes likely to drive 5.5% revenue growth, net profit may rise 4% YoY

ITC Ltd, the hotels-to-cigarettes conglomerate, is set to announce its Q1 results today. The company is expected to see decent revenue growth in the first quarter of FY25 driven by cigarettes and hotels business.

The FMCG major ITC is likely to report revenue of ₹16,700 crore in Q1FY25, a growth of 5.5% from ₹15,828.2 crore in the year-ago quarter, according to Livemint poll of five brokerages.

The company’s net profit during the quarter ended June 2024 is estimated to rise 4% to ₹5,094 crore from ₹4,902.7 crore, year-on-year (YoY).

ITC’s hotels segment is expected to post modest growth due to elections and heat waves, while FMCG segment growth continues with focus on premiumisation. However, Paper and agri business margins continue to be under pressure.

Cigarettes

ITC’s cigarette business is expected to grow 6% - 7% YoY and the segment’s volume growth is estimated in the range of 2% - 3%. Cigarette EBIT growth is expected at 5.3%, while EBIT margin is likely to decline by around 95 bps - 75 bps due to higher prices of leaf tobacco.

FMCG

In the FMCG segment, Kotak Institutional Equities estimates 7% YoY revenue growth with no major sequential price adjustments. It expects 10 bps YoY expansion in the segment’s EBIT margin to 8.4%.

Hotels

ITC hotels segment is expected to witness growth of 8-9% during the April-June 2024 quarter. Hotels segment EBIT margin is likely to expand 250 bps YoY.

Agri, Paper & Packaging

ITC’s Agri business growth is expected to be flat YoY, while paperboards segment growth is expected to decline 2% YoY due to tough operating conditions (subdued domestic demand conditions, weak export markets, weaker net realizations, and cheap Chinese supplies flooding the markets). Paperboards segment is estimated to report an EBIT margin of 14.5%.

Going ahead, ITC’s demand outlook on rural versus urban, competitive intensity and trends in raw material prices will be key monitorables. Moreover, analysts believe the management’s outlook on Hotels, Agri and paper & packaging businesses will also be keenly watched in ITC Q1 results today.

ITC share price opened higher on Thursday ahead of the announcement of Q1 results. At 9:40 am, ITC shares were trading 0.35% lower at ₹493.30 apiece on the BSE.

Read all Q1 results here

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