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Demand for health and hygiene products, foods segment, and other discretionary items along with healthy cigarette volumes growth is expected to drive ITC Ltd’s March quarter (Q4FY21) revenue higher, said analysts. While the hotels segment is expected to remain a drag, they expect Agri and paper board segments to support overall growth. ITC, which is slated to post its quarterly numbers on June 1, is likely to post high single-digit revenue growth on a yearly basis during the quarter under review, although the profit after tax (PAT) is expected to fall.
Shares of the FMCG major gained 4.5 per cent during the January-March period as against a rise of 2.11 per cent in the BSE FMCG index and 3.7 per cent in the benchmark Sensex. The brokerage expects ITC’s PAT to decline 1.2 per cent year-on-year (YoY) to Rs 3,751.7 crore for the quarter ended March 2021, from Rs 3,797 crore posted in the same period last year. Meanwhile, on a quarter-on-quarter (QoQ) basis, PAT could jump 2.4 per cent. ITC’s PAT during the December quarter stood at Rs 3,663 crore.
“Operating profit is likely to increase 4.9 per cent YoY on the back of lower gross margins. The company would continue the cost-cutting measures to protect the profitability of the business,” said Sanjay Manyal, research analyst at ICICI Securities.
The brokerage pegs revenue for the quarter under review at Rs 12,547.5 crore as against Rs 11,420.04 posted in the March 2020 quarter, implying growth of 9.9 per cent YoY. Sequentially, the figure is expected to remain stable as against Rs 12,580.40 crore posted in the December quarter of FY21.
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