Particle.news
Download on the App Store

ITC Q2 Preview: Brokers See Cigarette-Led Growth With Modest Upside

Analysts flag GST transition effects as a drag on FMCG performance with cigarette margins squeezed by higher-cost leaf tobacco.

Overview

  • ITC reports September-quarter results on Oct. 30, with consensus pegging standalone revenue near Rs 19,466–19,546 crore and net profit around Rs 5,085–5,148 crore.
  • Cigarette volumes are projected to rise about 6% with revenue up roughly 6–7%, though Kotak expects segment EBIT margin to decline about 200 bps year-on-year.
  • FMCG growth is seen at roughly 4–5% year-on-year as channel destocking tied to GST changes cuts 300–350 basis points from segment growth.
  • Agri business is forecast to expand about 10% year-on-year, while paperboards remain soft at roughly 4–5% given subdued demand and cheaper Chinese supplies.
  • Major brokerages maintain Buy or Overweight views with targets around Rs 470–525, while citing regulatory or tax action on tobacco and competitive pressures as key risks.