>ITC LIMITED (KREDENT FINANCE)

ITC Ltd. declared its first quarter result today. The results came in line with the street expectations. The sales were around 2.0% below Bloomberg consensus estimate, whereas the net profit was around 2.2% above, which was on account better performance of its cigarettes business.

RESULT HIGHLIGHTS:
■ The net sales for the quarter ended June 09 grew by 4.69% to Rs. 4,082.68 cr, backed by better performance of its cigarettes business

■ The cigarettes and paper business reported a 23.34% & 15.96% y-o-y growth to Rs. 2,145.60 cr and 702.62 cr respectively while other segments named Hotels and Agri- Business reported a decline of 27.68% & 48.72% y-o-y to Rs. 940.61 cr and Rs. 702.62 cr respectively

■ The EBIDTA for the quarter ended June 09 increased by 19.45% to Rs. 1,387.33 cr while the EBIDTA margin improved by 405 basis points (bps) to 33.57% as compared to 29.52% reported a year ago

■ Improve in the EBIDTA margin is mainly on account of decline the total expenditure cost. The consumption of raw material as a percentage of net sales declined by 156 bps to Rs. 1,339.34 cr as compared to Rs. 1,336.20 cr reported a year ago

■ Company’s interest expense increased by whopping 314.18% y-o-y to a level of Rs. 5.84 cr while the other income declined by 9.39% y-o-y to Rs. 87.57 cr

■ Company’s Net Profit for the quarter ended June 09 rose by significantly 17.4% to Rs. 878.7 cr as compared to Rs.748.67 cr reported a year ago while, the NPM improved by 223 bps y-o-y to 21.26% as against 19.03% reported a year ago

■ Company’s Diluted EPS grew by around 17.77%, to Rs. 2.32/ share

Looking forward, the company business might face some problem due to below than average monsoon rains. The poor monsoon is likely to put pressure on the prices of certain commodities which would indeed also result in lower disposable income for farmers. As company has significant market share in Rural India, the sales and profitability might be impacted going forward

To see full report: ITC LIMITED