ITC Q3 Earnings Today: With Cigarettes-to-FMCG conglomerate ITC all set to announce its fiscal third quarter earnings on Thursday (February 6), brokerage firms and analysts said that the company is expected to post a profit decline of around 3.4 per cent to Rs 5,150 crore, due to higher other income and low tax rate in the base quarter. It had posted a profit of Rs 4992.87 crore during the second quarter of the current fiscal year. However, the FMCG major is likely to report the highest revenue among all its listed peers. ITC will also declare its interim dividend today.
Earlier in January, ITC had demerged its hotel business as a standalone entity in a 1:10 ratio and the hotels business made its debut on the exchanges as a standalone entity. ITC continues to hold a 40 per cent stake in the new entity and the remaining 60 per cent is distributed to shareholders. On January 29, ITC Hotels had released its Q3 numbers with profit at Rs 0.74 crore and revenue was recorded at Rs 1.64 crore.
According to a CNBC TV18 poll, ITC is expected to post Q3 revenue at Rs 18,050 crore and net profit is estimated at Rs 5,135 crore.
Earlier on January 24, ITC had, in a regulatory filing, announced that the company will release its Q3 numbers on February 6. “We write to advise that a Meeting of the Board of Directors of the Company has been convened for Thursday, 6th February, 2025, inter alia, to: (a) consider and approve the Unaudited Standalone and Consolidated Financial Results of the Company along with the Unaudited Segment-wise Revenue, Results, Assets and Liabilities for the Quarter and Nine Months ended 31st December, 2024; and (b) consider declaration of Interim Dividend for the financial year ending on 31st March, 2025,” ITC had said.
Nuvama said that ITC’s profit is expected to fall 11.4 per cent YoY to Rs 4,942 crore. Its cigarette volume is likely to grow by 3.5 per cent YoY and the segment’s margin may compress slightly due to raw material inflation. In the FMCG space, Nuvama said, ITC will report a 3 per cent YoY growth in sales and a fall in EBITDA margins due to sharp RM inflation in palm oil, maida and negative pricing in notebooks.
For YES Securities, within its coverage, YoY volume growth is expected to be stronger for Varun Beverages (ex-BevCo & DRC volumes), Marico, Britannia, ITC and Jyothy Labs. “We expect ITC’s overall topline to grow by 13.1 per cent YoY as we expect YoY volume growth in cigarette business to be ~6 per cent (5yr CAGR: 4.5 per cent; similar to previous quarter). Other-FMCG business, Hotels Agri business, and PPP are expected to grow at 9 per cent, 16 per cent, 30 per cent and 5 per cent YoY respectively,” the brokerage firm said. At the company level, YES Securities said, gross margin and EBITDA margin is expected to decline by around 340bps and 190bps YoY to 55 per cent and 34.6 per cent respectively. Even as EBITDA is slated to grow by 7.2 per cent YoY, APAT is expected to decline by 4.3 per cent YoY largely due to low tax rate in the base quarter.
Per YES Securities estimates, ITC will report Q3 adjusted profit at Rs 5336.00 crore, down 4.3 per cent YoY, revenue will be at Rs 18,638.20 crore, up 13.1 per cent and EBITDA will come in at Rs 6455.80 crore, up 7.2 per cent.
Axis Securities, meanwhile, expect 9 per cent YoY revenue growth driven by: 1) Cigarette to grow 6 per cent YoY (3 per cent volume), 2) FMCG to grow at 5 per cent YoY, 3) Hotels 15 per cent YoY, 4) Papers 2 per cent YoY and 5) Agri 5 per cent YoY. Per the brokerage firm, ITC will report Q3 profit at Rs 5150 crore, down 7.6 per cent YoY, revenue will come in at Rs 17,713 crore, up 8.6 per cent and EBITDA will stand at Rs 6231 crore, up 3.4 per cent on-year.
Shares of ITC Ltd were down by 1.47 per cent at 12:00 pm to a trading prices of Rs 441.80.
Here are things to watch out for as ITC will announce its Q3 earnings report on February 6:
– Investors and market participants will keep a watch on the interim dividend announcement by the FMCG major. ITC had earlier announced that it will declare its interim dividend for the financial year ending on 31st March, 2025.
– Another monitorable will be commentary on demand outlook on rural vs urban. While urban markets account for two-thirds of FMCG sales by value, rural areas contribute one-third. According to a NielsenIQ report, in the July-September quarter, demand in the rural areas continued to outpace that of cities, growing twice as fast as urban markets, driven by food staples and recovery of mid-sized companies.
– ITC will also give an update on the Hotels and Agri business outlook.
– Another key announcement awaited on February 6 is the raw material trends and also the pricing strategy.