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ITC: Flat numbers across... - Views on News from Equitymaster
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ITC: Flat numbers across...
Nov 3, 2015

ITC declared results for the quarter ended September 2015. The company's revenues were down by 1% YoY, while profits remained flat. Here is our analysis of the results:
Performance summary
  • Revenues fall by 1% YoY with the tobacco business remaining flat, while the agri business declines by 10% YoY. Non-cigarette FMCG business grows by 7% YoY.
  • Operating profits rise by 2% YoY as margins expand to 40% compared to 38.7% in same period of last year. Margin expansion on account of lower input costs (as a percentage of sales).
  • At the EBIT level, margins of the cigarette and agri businesses expand on a YoY basis.
  • Profits remain flat for the year.

Financial performance summary

(Rs m) 2QFY15 2QFY16 Change 2HFY15 2HFY16 Change
Revenues 90,237 89,042 -1.3% 182,720 174,919 -4.3%
Expenditure 55,351 53,441 -3.4% 115,058 105,460 -8.3%
Operating profit (EBITDA) 34,887 35,601 2.0% 67,662 69,460 2.7%
EBITDA margin (%) 38.7% 40.0%   37.0% 39.7%  
Depreciation 2,432 2,588 6.4% 4,745 5,170 9.0%
EBIT 32,454 33,013 1.7% 62,917 64,289 2.2%
EBIT margin (%) 36.0% 37.1%   34.4% 36.8%  
Interest 184 103 -43.9% 335 208 -38.1%
Other income 3,562 3,992 12.1% 5,908 7,142 20.9%
Profit before tax 35,833 36,902 3.0% 68,489 71,224 4.0%
Tax 11,581 12,589 8.7% 22,374 24,257 8.4%
Profit after tax/(loss) 24,252 24,313 0.3% 46,116 46,967 1.8%
Net profit margin (%) 26.9% 27.3%   25.2% 26.9%  
No. of shares (m)       7,974 8,026  
Diluted earnings per share (Rs)*         12.1  
Price to earnings ratio (x)         27.7  

* trailing 12 month earnings

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INTRODUCTION:
Equitymaster Agora Research Private Limited (hereinafter referred to as "Equitymaster"/"Company") was incorporated on October 25, 2007. Equitymaster is a joint venture between Quantum Information Services Private Limited (QIS) and Agora group. Equitymaster is a SEBI registered Research Analyst under the SEBI (Research Analysts) Regulations, 2014 with registration number INH000000537.

BUSINESS ACTIVITY:
An independent research initiative, Equitymaster is committed to providing honest and unbiased views, opinions and recommendations on various investment opportunities across asset classes.

DISCIPLINARY HISTORY:
There are no outstanding litigations against the Company, it subsidiaries and its Directors.

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DISCLOSURE WITH REGARDS TO OWNERSHIP AND MATERIAL CONFLICTS OF INTEREST:
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  2. Equitymaster has financial interest in the subject company.
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  1. Buy recommendation: This means that the investor could consider buying the concerned stock at current market price keeping in mind the tenure and objective of the recommendation service.
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Oct 19, 2017 07:33 PM

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