India’a top FMCG firm ITC Ltd., is set to report there june quarter financial earnings today post the market hours. Ahead of the earnings release, the stock rose 1.5% intraday, and closed at 1% higher on thursday. though Stock remains down nearly 9.7 per cent year-to-date.
Street Expectations
According to Zee Business research, the diversified conglomerate may post a 4.5 per cent year-on-year rise in consolidated net profit at around Rs 5,050 crore, compared to Rs 4,830 crore in the same quarter of the previous financial year. The cigarette business is expected to lead the charge, while growth in the FMCG segment may remain under pressure due to persistent input cost concerns and slower demand recovery in rural India.
The company’s revenue from operations is expected to grow by 3 per cent year-on-year to approximately Rs 16,090 crore, from Rs 15,828 crore in Q1 FY25. However, EBITDA margins are likely to decline by 90 basis points to 35.5 per cent, down from 36.4 per cent a year ago, mainly due to margin compression in the non-cigarette FMCG and paperboard businesses.
Segment-wise Expectations:
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Cigarette Business: Expected to grow steadily with volume expansion of up to 4.5 per cent, supported by an improved product mix. However, margins may remain under pressure.
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FMCG Segment: Margins are likely to be impacted due to inflation in raw material costs, although revenue growth will remain positive.
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Agri Business: Expected to perform strongly, aided by higher sales in leaf tobacco, value-added spices, and coffee.
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Paperboards and Packaging: Profits could fall by up to 30% YoY due to rising import competition.
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Overall Margin Outlook: Consolidated margins may compress due to rising input cost pressures across segments.
Stock Performance & Technical View:
ITC’s stock is trading below its 21-week and 50-week EMAs, signaling a range-bound trend. The stock is resisting at around Rs 444, which is a significant level corresponding to its previous swing high, and is supported at Rs 395. A break in either direction may indicate the direction of the stock in the near term.
Market Outlook:
For 28 August expiry, ITC’s Rs415 ATM strike of Call and Put have both been valued at Rs16. Implied volatility has increased to 20%, which is above the 10-day historic volatility.
Investor Outlook:
Attention to remain focused on any commentary around the demerger of the hotels business and volume visibility across cigarettes and FMCG. The stock has traded range-bound in recent weeks, underperforming broader indices, and the Q1 print may set the tone for near-term movement.
