ITC: Topline pressure - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

ITC: Topline pressure

Jul 25, 2003

Tobacco major, ITC Limited, has recorded a marginal 1.5% topline growth during the June quarter. However, the company has managed to report a healthy 15.5% bottomline growth during the quarter. The company has attributed the topline sluggishness to a 10-day transporters’ strike in April ’03 which disrupted shipments considerably, particularly in the paperboards and agri business segments.

(Rs m) 1QFY03 1QFY04 Change
Net Sales 14,080 14,289 1.5%
Other Income 260 571 119.7%
Expenditure 8,396 8,169 -2.7%
Operating Profit (EBDIT) 5,685 6,120 7.7%
Operating Profit Margin (%) 40.4% 42.8%  
Interest (net) 86 55 -36.1%
Depreciation 533 594 11.4%
Profit before Tax 5,325 6,041 13.4%
Tax 1,886 2,069 9.7%
Profit after Tax/(Loss) 3,439 3,972 15.5%
Net profit margin (%) 24.4% 27.8%  
No. of Shares (eoy) (m) 247.5 247.5  
Diluted Earnings per share* 55.6 64.2  
Current P/e ratio   11.6  

An encouraging factor in the performance was the expansion in the operating margins by over 2%. This seems largely to have come about owing to the introduction of super premium cigarette brands like 'Insignia' during the quarter. The company also launched another variant of the 'Wills' brand during the quarter.

On the retailing front, ITC continues to add more brands to its portfolio. The company's mid-priced segment offering 'John Players' distribution network now extends to 1,600 outlets. The company has launched premium eye wear 'Valentino', as well as ladies handbags from 'Furla' in a bid to expand its offerings in the Wills Lifestyle stores. on the hotels front, ITC registered revenues to the tune of Rs 500 m in the quarter (up 22% YoY). The growth in revenues was led by the commisioning of the Sonar Bangla in Kolkata.

The e-choupal model was further ramped up to 2,150 installations covering 12,000 villages. As per company, its greeting cards business attained a 20% market share during the quarter. We have yet to get the overall results of each segment, and hence are not able to comment on the profitability of each segment.

The ITC stock trades at 11.6x annualised 1QFY04 earnings. The company has taken many initiatives in a bid to de-risk its revenue profile towards non-tobacco related businesses. Most of its new businesses are in a nascent stage. Consequently, the markets have been conservative on ITC's prospects.

Equitymaster requests your view! Post a comment on "ITC: Topline pressure". Click here!


More Views on News

ITC Announces Quarterly Results (1QFY21); Net Profit Down 26.2% (Quarterly Result Update)

Jul 30, 2020 | Updated on Jul 30, 2020

For the quarter ended June 2020, ITC has posted a net profit of Rs 23 bn (down 26.2% YoY). Sales on the other hand came in at Rs 95 bn (down 17.4% YoY). Read on for a complete analysis of ITC's quarterly results.

ITC Announces Quarterly Results (4QFY20); Net Profit Up 9.1% (Quarterly Result Update)

Jun 29, 2020 | Updated on Jun 29, 2020

For the quarter ended March 2020, ITC has posted a net profit of Rs 38 bn (up 9.1% YoY). Sales on the other hand came in at Rs 114 bn (down 6.4% YoY). Read on for a complete analysis of ITC's quarterly results.

ITC 2018-19 Annual Report Analysis (Annual Result Update)

Jun 17, 2019 | Updated on Jun 17, 2019

Here's an analysis of the annual report of ITC for 2018-19. It includes a full income statement, balance sheet and cash flow analysis of ITC. Also includes updates on the valuation of ITC.

More Views on News

Most Popular

How the 8-Year Cycle Can Help Identify Multibaggers (Fast Profits Daily)

Sep 11, 2020

This is how you can apply the greed and fear cycle in the market to pick stocks.

I Recommended this Stock over Page Industries because it's Relevant to Doubling Your Income (Profit Hunter)

Sep 7, 2020

Things are not often what they seem in the market and how you can take advantage of this.

The NASDAQ Whale Could Harm Your Portfolio (Fast Profits Daily)

Sep 7, 2020

The discovery of Softbank pushing up prices on the NASDAQ will cause volatility in the market. Stay alert!

This Could Be the Best September for Auto Stocks (Profit Hunter)

Sep 11, 2020

Here's why I think this month could be a great for auto stocks.


Covid-19 Proof
Multibagger Stocks

Covid19 Proof Multibaggers
Get this special report, authored by Equitymaster's top analysts now!
We will never sell or rent your email id.
Please read our Terms


Sep 18, 2020 (Close)