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.
Operating Profit (EBDIT)
Operating Profit Margin (%)
Profit before Tax
Profit after Tax/(Loss)
Net profit margin (%)
No. of Shares (eoy) (m)
Diluted Earnings per share*
Current P/e ratio
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.
ITC Ltd has announced third quarter results of the financial year 2016-2017 (3QFY17). The company has reported 4.7% YoY and 5.7% YoY growth in revenues and net profits respectively. Here is our analysis of the results.
LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.
SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India. Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: email@example.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407