ITC stated atta, spices, private wash and agarbatti drove development throughout the quarter amidst comparatively subdued client demand atmosphere. In the stationery enterprise, Classmate notebooks and pens witnessed “strong growth” on YoY foundation.

Segment Revenue up 8.3 per cent YoY; 2 Year. CAGR +14.5 per cent on a excessive base; Q2 FY23 had witnessed sharp sequential development

– Strong YoY development in Atta, Spices, Personal Wash and Agarbatti

– Notebooks & Pens continues to witness robust traction

▪ Rapid scale up in Alternate Channels

– Channel particular enterprise plans, collaborations and format-based assortments allow strong traction

▪ Commodity value deflation on YoY foundation; sequential uptick in sure commodities (viz. wheat, maida, sugar, potato)

▪ Increasing aggressive depth together with from native / regional gamers within the backdrop of commodity value deflation

Performance in Paperboards, Paper and Packaging Segment displays the impression of low priced Chinese provides and muted demand in export markets, sharp discount in international pulp costs and high-base impact; home demand comparatively subdued in sure discretionary classes

̶ Sharp drop in web gross sales realisation and international pulp costs witnessed throughout the quarter are prone to have bottomed out; inexperienced shoots of revival in demand had been seen in direction of the top of the quarter

̶ The challenge for augmentation of in-house chemical pulp capability by appx. 20 per cent accomplished throughout the quarter; will additional improve substitution of imported pulp and allow discount in working prices

̶ Integrated enterprise mannequin and strategic interventions (in-house pulp, VAP, Digital, HPRB) partly mitigate strain on margins, stated ITC in its alternate submitting.

Agri Business Segment Revenue up 26.4 per cent YoY (excluding Wheat and Rice exports) pushed by Value Added Agri merchandise and Leaf Tobacco

̶ Segment PBIT up 3.3 per cent YoY (2 yaear CAGR +9.7 per cent)

̶ Geopolitical tensions and local weather emergencies elevate considerations on meals safety and meals inflation; commerce restrictions imposed by the federal government on agri commodities restrict enterprise alternatives for the section

ITC’s strong efficiency continued in FMCG – Others with the section income up 8.3 per cent YoY on a excessive base. The two-year CAGR got here in at 14.5 per cent. The section EBITDA margin expanded 150 bps YoY to 11 per cent YoY. Atta, Spices, Personal Wash and Agarbatti drove development amidst comparatively subdued client demand atmosphere.

Stellar efficiency in resorts enterprise with report excessive second quarter efficiency; section income up 21 per cent on a excessive base, stated ITC in its assertion.

– Segment EBITDA margin up 170 bps YoY to 30.7 per cent pushed by increased RevPAR, structural price interventions and working leverage, stated ITC.

– ITC Hotels was honoured to have completely curated and served from the most effective of India’s culinary heritage on the G20 summit, Bharat Mandapam, New Delhi. ITC Maurya additionally hosted the President of the United States of America and the whole US delegation to the G20 Summit

– Scheme of resort demerger authorised by ITC Board in August 2023 is progressing as per scheduled timelines, stated ITC in its regulatory submitting.

ITC’s board, at its assembly in the present day, beneficial the appointment of Mr. Rahul Jain as a Non-Executive Director of the Company for a interval of three years with impact from January 1, 2024

Resilient efficiency in Cigarettes Segment; Net Segment Revenue up 8.5 per cent YoY 

– Sustained quantity claw again from illicit commerce on the again of deterrent actions by enforcement businesses and relative stability in taxes

– Market standing strengthened by way of centered portfolio/market interventions and agile execution, stated ITC in a press release

The FMCG main’s standalone web revenue rose 10.3 per cent to ₹4,927 crore, in comparison with ₹4,466 crore within the corresponding interval final 12 months. Revenue from operations additionally ticked 2.6 per cent increased to ₹16,550 crore. The gross income (excluding wheat and rice exports) rose 8.9 per cent year-on-year.

Domestic brokerage agency JM Financials sees ITC’s Q2 web revenue at ₹4,847 crore, reporting a development of 8.5 per cent year-on-year. The development in revenue is probably going on the again of strong FMCG and cigarettes verticals.

According to the regulatory submitting, the corporate’s earnings earlier than curiosity, taxes, depreciation, and amortisation (EBITDA) for Q1FY24 stood at ₹6,250 crore with a year-on-year development of 10.7 per cent as in comparison with ₹5,648 crore throughout the identical interval earlier 12 months.

The firm additional highlighted that its robust development momentum was sustained throughout the quarter due to its deal with buyer centricity, elevated digital adoption, execution excellence, and agility.

Sharekhan stated ITC’s cigarette enterprise income is predicted to be up 9 per cent YoY, aided by 5-6 per cent quantity development, whereas the non-cigarette FMCG enterprise is predicted to develop at 15 per cent YoY. It expects the resort enterprise to develop 16 per cent YoY on sustained demand. The paper enterprise is predicted to develop by 4 per cent YoY whereas the agri enterprise is prone to log 10 per cent fall in revenues, as per analysts.

According to brokerage companies, the important thing monitorables from ITC Q2 earnings will probably be bulletins on cigarette quantity and blend enchancment, FMCG enterprise EBIT margin, and outlook on paper cycle and agri and resort companies. The margins are seen increasing on a yearly foundation amid a softening raw-material costs, however might even see some contraction sequentially.

ITC’s agri enterprise confronted setbacks within the June quarter because of export restrictions, whereas the paper section was affected by demand points, competitors from China, decrease pulp costs, and better enter prices. Motilal Oswal Financial Services expects an EPS CAGR of ~14 per cent over the subsequent two years as properly.

The board of the ITC has authorised buying 25 per cent stake of Maharaja Heritage from Russel Credit. The shareholders will get one resort firm share for 10 held in firm, the corporate stated. The indicative timeline for itemizing of ITC Hotels roughly 15 months.

ITC Board is prone to announce one other interim dividend for the present fiscal whereas declaring Q2FY24 outcomes in the present day. In the previous June quarter, ITC acknowledged that weak demand circumstances, low-cost Chinese provides on worldwide markets, a pointy lower within the value of pulp globally on a excessive base, and comparatively low buyer offtake in home markets (destocking) hampered efficiency throughout the quarter.

Hindustan Unilever (HUL) reported a bigger-than-expected enhance in quarterly revenue on Thursday as the corporate benefited from elevated gross sales from its magnificence, dwelling, and private care segments. The Indian unit of UK’s Unilever reported a 3.9 per cent rise in revenue to ₹27.17 billion for the three months to September 30 from a 12 months earlier. Earlier within the day, Maggi instantaneous noodles-maker Nestle India posted a third-quarter revenue beat, whereas the tobacco-to-hotels conglomerate ITC is but to report the quarterly earnings.

Vaishali Parekh, Vice President – Technical Research, Prabhudas Lilladher has given a ‘buy’ score on ITC at ₹452 with a cease lack of ₹430 at a goal value of ₹500.

‘’The inventory has corrected properly from the extent of 500 to backside out at round 435 ranges and has maintained a superb help on earlier event additionally and has indicated a bounce again with a optimistic candle sample within the day by day chart to indicate energy and potential to present a upward motion within the coming days,” stated Parekh.

ITC knowledgeable in a regulatory submitting to the inventory exchanges that the corporate’s board will convene a gathering on Thursday to contemplate and approve the September quarter outcomes for the present fiscal.

Earlier this month, ITC Hotels had introduced the signing of its first ‘Storii’ property in Kolkata, West Bengal. The property will probably be situated close to the metropolis and is slated to open in early 2024. According to an organization spokesman, ITC Hotels already has three ‘Storii’ properties that are presently operational in Goa and Dharamshala.

Kotak Institutional Equities expects the corporate’s FMCG section is predicted to report an annual income development of 12 per cent pushed by client demand and hike in costs. ITC launched Fiama Sandalwood Oil and Patchouli Gel Bar to strengthen their place within the private wash house in India, in accordance with the brokerage.

ITC’s resort enterprise demerger has been cited as one of many key triggers for additional potential upside on the inventory by analysts. Centrum Broking expects double-digit earnings earlier than curiosity and tax (EBIT) development in FMCG and cigarette verticals within the September quarter.

Nifty 50 in the present day: Domestic market benchmarks the Sensex and the Nifty 50 closed within the unfavorable territory for the second consecutive session on Thursday, October 19 amid weak international cues. Nifty 50 closed the day at 19,624.70, down 46 factors, or 0.24 per cent whereas the Sensex fell 248 factors, or 0.38 per cent, to finish at 65,629.24.

According to brokerages, ITC’s resort section’s income is predicted to develop 11 per cent. The paperboard, paper, and packaging section’s income is prone to drop 11 per cent because of a fall in pricing. The agri section can also be anticipated to report a income decline of 14 per cent.

ITC Ltd reported an 17.6 per cent year-on-year rise in its web revenue for the fiscal’s first quarter ended June (Q1FY24) to ₹4,902.74 crore. The firm had reported a revenue of ₹4,169.38 crore within the year-ago interval. The firm’s income from operations fell 7.2 per cent on 12 months to ₹16,995.49 crores throughout the quarter ended June from ₹18,320.16 crore in Q1FY23. Total earnings to ₹17,704.23 crore within the first quarter. It stood at Ts 18,632.85, crore within the year-ago interval.

Brokerages and analysts anticipate ITC to report robust development in FMCG and cigarettes biz segments in September quarter. The complete web revenue could rise between 10-15 per cent, in accordance with common estimates by main brokerages

Ahead of the announcement of Q2 outcomes, shares of ITC settled 0.28 per cent decrease at ₹450.30 apiece on the BSE.

ITC is predicted to report complete gross sales development of seven% YoY to ₹18,370 crore in Q2Fy24, whereas its web revenue is predicted to rise 10% YoY to ₹4,910 crore. EBITDA could develop 7.4% to ₹6,300 crore, whereas EBITDA margin is prone to broaden by 11 bps to 34.3%, as per HDFC Securities.

It fashions 6% YoY development in cigarette income, with quantity development of 5% YoY (5% 4-year CAGR). The nonCigarette enterprise is predicted to develop 5% YoY. It fashions 12% YoY development in FMCG and expects cigarette EBIT to develop by 6% YoY. FMCG EBIT margin is seen at 8% versus 6.6% YoY.

With excessive inflation having dented the online earnings degree of bottom-of-the-pyramid consumption, we proceed to anticipate a gradual restoration in demand vs the expectation of a fast rebound, extra so in rural markets. Moreover, we anticipate divergence between quantity and worth development to normalise in FY24 with quantity development again at its historic common of midsingle digit. Easing commodity inflation will assist maintain gross margin enlargement. With value cuts and better client promotions, GM enlargement will probably be slower within the coming quarters. Companies are additionally reinvesting a few of these beneficial properties in product innovation, distribution enlargement, and advertising and marketing spending, which shall restrict working margin enlargement, HDFC Securities stated.

JM Financial expects ITC’s cigarette volumes to proceed to develop properly at 5% and EBIT development in excessive single-digit. Non-cigarette segments to proceed contributing strongly – FMCG, Hotels, Agri however Paperboards prone to stay weak.

It expects cigarette EBIT development of 8.5%; FMCG gross sales up 9% and EBIT development of 46%; Hotels income to develop 21% and EBIT to ₹1.5 billion.

ITC is high choose amongst client shares of Motilal Oswal Financial Services. The cigarettes enterprise continues to ship quantity development and market share beneficial properties within the absence of competitors from illicit commerce. The FMCG – Others section has additionally delivered robust development throughout markets and product strains, and as enter costs decline, we anticipate an enlargement in margins too, it stated.

The brokerage has a ‘Buy’ score on the inventory with a goal value of ₹540 per share.

ITC shares have seen an honest efficiency this 12 months. ITC share value has risen over 35% year-to-date (YTD), whereas it’s up greater than 29% within the final one 12 months. ITC inventory has jumped over 167% in three years. However, currently, ITC shares have remained flat. The inventory us down 6% within the final three months and is flat in a single month.

Rural demand restoration has been delayed because of excessive inflation, flash floods and patchy monsoons in a number of components of the nation. Competition from unorganized gamers has been seen in meals, HPC and so on. rural demand restoration hinges on excessive Govt expenditure forward of elections and pageant demand enhance pushed by increased MSP and softening inflation. 

ITC is predicted to report web gross sales development of 4.6% YoY to ₹16,870 crore, whereas its web revenue is predicted to rise 8.4% YoY to ₹4,843 crore. EBITDA is prone to enhance 6.5% to ₹6,247 crore and EBITDA margin to broaden by 67 bps to 37%, as per Kotak Institutional Equities.

In the FMCG section, it estimates 12% YoY income development as some value hikes to anniversarize and 240 bps YoY enlargement in EBIT margin to 9%. It expects 10% development in resorts, higher than 1Q, which was partly impacted by fewer wedding ceremony days and pre-planned renovations (EBIT margin of twenty-two%, +10 bps QoQ). 

The agri enterprise is predicted to say no by 5% YoY due the impression of ban on wheat/rice exports, whereas paperboards might decline by 3% YoY on muted demand and value correction.

Gross margins for many firms ought to enhance meaningfully YoY because of a benign uncooked materials index and calibrated value hikes taken over the previous 12 months. Notably, this quarter will see outstanding enchancment as a result of the bottom quarter was most impacted, being the second quarter after the Russia-Ukraine struggle started, when crude touched its peak and corporations had to purchase high-cost stock, Phillip Capital stated. 

Incrementally, HPC firms will see a a lot better enlargement of their gross margins than meals firms, because the latter haven’t suffered a lot because of inflation in crude oil and crude derivatives. Overall, advantage of gross-margin enlargement will solely circulation partially to EBITDA, as client firms are prone to make investments in direction of strengthening model fairness (i.e., increased A&P spends)

The demand traits of client firms are anticipated to melt in 2QFY24. This may be attributed to a latest surge in inflation and an uneven unfold of the monsoon, each of which have disrupted the anticipated restoration of firms on this sector. Motilal Oswal expects the 19 client firms below its protection to report a cumulative development of 6.3% in income, 14.2% in EBITDA, and 14.8% in PAT in 2QFY24. In phrases of quantity, its FMCG Universe is prone to submit low single-digit development in 2QFY24, whereas paints and adhesive are anticipated to report excessive single-digit quantity development. ‘Cigarette’ is exhibiting moderation in demand and is predicted to ship mid- single-digit quantity development. Margins are prone to broaden.

FMCG section is predicted to proceed its development momentum, with ~14.5% income development as out of dwelling consumption driving demand for packaged meals together with able to eat section additionally supported by distribution scale up, as per Centrum Broking.

The resorts section might report ~12.5% development YoY (very excessive base) with robust home tourism demand throughout resort segments and heightened demand from company bookings, but occupancy charges stay increased at +70% regardless of an increase in ARR at 10%. 

Though paper costs are actually correcting, on a better base final 12 months, the spherical of stock correction within the commerce to weaken development for the paper section with ~2.5% decline in revenues. We anticipate agri enterprise to say no ~6% YoY contemplating increased export parts within the base quarter, Centrum Broking stated.

Key issues to observe in ITC Q2 outcomes can be cigarette quantity and blend enchancment, FMCG enterprise EBIT margin, outlook on paper cycle and outlook on Agri and Hotel companies.

Cigarette volumes are prone to broaden by 6.2%. FMCG to submit 12.5% development YoY with margin enlargement. Paper enterprise gross sales and EBIT to say no because of decrease pricing and margins within the base quarter. Hotel enterprise ought to do properly with sustained development, increased ARR and occupancy charges. Agri ought to report decrease gross sales because of wheat exports within the base quarter. PAT anticipated to develop 11.7%, stated brokerage agency Prabhudas Lilladher.

Ahead of ITC outcomes, Nestle India reported a web revenue of ₹908 crore within the quarter ended September 2023, registering a development of 37.27% from ₹661.46 crore in the identical quarter final 12 months. Nestle India’s income in Q3CY23 elevated 9.5% to ₹5,036.8 crore from ₹4,601.8 crore within the year-ago interval.

Nestle India’s board additionally authorised a dividend of ₹140 per share and inventory cut up within the ratio of 1:10. Read full report here

In Q2, Centrum Broking expects ITC to report 5.5% income development led by robust development in cigarettes portfolio and different FMCG segments. Its channel checks counsel ITC’s cigarette section to develop 8.9% in worth and 5.0% in quantity phrases, contemplating the normalised base and improved OOH consumption. 

Due to say no in agri enterprise, regardless of different enterprise firing properly, total income development to average for ITC. On the working margin entrance, we anticipate EBITDA to develop at 10.6% with EBITDA margins at 37.3% (+170 bps). We anticipate web revenue to extend by 10.5% pushed by increased different earnings, Centrum Broking stated.

Along with ITC, different FMCG majors Hindustan Unilever Ltd (HUL) and Nestle India may even announce their outcomes for the quarter ended September 2023.

The majority of the FMCG firms are anticipated to report low-to-mid-single-digit quantity development. The sector as an entire is predicted to see muted quantity development. Analysts declare that August of this 12 months had the bottom rainfall deficit of any month in over a century, measuring at 36%, which hindered the restoration of rural areas.

Hindustan Unilever’s income is predicted to average on the backdrop of value reductions, value hikes for anniversarization, and a delayed festive season.

Meanwhile, Nestle India is prone to report a wholesome year-on-year (YoY) development in its July-September quarter income and gross margin due to secure quantity development and robust pricing development throughout the quarter.

A complete of 32 listed firms are going to announce their Q2 outcomes 2023 in the present day and people 32 listed firms embody Hindustan Unilever Ltd (HUL), ITC, Nestle India, UltraTech Cement, Havells India, MphasiS, Metro Brands, Coforge, Voltas, Cyient, PVR INOX, Equitas Small Finance Bank, and so on. Read full report here

HDFC Securities fashions 6% YoY development in cigarette income, with quantity development of 5% YoY (5% 4-year CAGR). The nonCigarette enterprise is predicted to develop 5% YoY. It fashions 12% YoY development in FMCG. It expects cigarette EBIT to develop by 6% YoY and fashions FMCG EBIT margin at 8% versus 6.6% YoY. EBITDA to develop by 7% YoY.

We anticipate 6% YoY quantity development in Cigarettes with 5-year common quantity development in mid-single digit enterprise. We anticipate gross margin and EBITDA margin to broaden 80 bps and 90 bps YoY, respectively. Watch out for Hotels income development and profitability and assess the demerger course of. Outlook on the opposite FMCG, Agri and paper & packaging companies is a key monitorable, Motilal Oswal Financial Services stated.

Phillip Capital expects mid-single digit cigarette quantity development for ITC in Q2FY24 on again of market share beneficial properties, deal with innovation and return to normalcy. FMCG enterprise development to average as pricing anniversaries, whereas agri and paper is predicted to see important correction in total pricing. 

EBITDA margin to see first rate development owing to improved gross sales combine, advantages of built-in manufacturing amenities, Phillip Capital stated.

In the FMCG section, Kotak Institutional Equities estimates 12% YoY development, because it expects some value hikes to anniversarize and 65 bps QoQ and 240 bps YoY enlargement in EBIT margin to 9%. 

We anticipate 10% development in resorts, higher than 1Q, which was partly impacted by fewer wedding ceremony days and pre-planned renovations (EBIT margin of twenty-two%, +10 bps QoQ). The agri enterprise is predicted to say no by 5% YoY (impression of ban on wheat/rice exports), whereas paperboards might decline by 3% YoY (muted demand and value correction), stated the brokerage.

ITC share value opened increased on Thursday forward of the discharge of Q2 outcomes later in the present day. ITC shares opened 0.58% increased at ₹454.20 apiece as towards earlier shut of ₹451.55 apiece on the BSE.