BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
ITC Ltd. reported higher-than-expected sales growth mainly due to better-than expected agriculture business resilience in Q1 FY21.
However, Ebitda and profit after tax were disappointing due to (a) estimated 37% cigarette volume decline, (b) far lower contribution of the highly profitable cigarette business to total sales (32% in Q1 FY21 versus usual levels of approximately 40%), and (c) massive losses in the hospitality business (approximately 8% negative impact on Ebitda in Q1 FY21 versus 1% usual positive contribution).
Our channel checks indicate that cigarette volumes are close to pre-Covid-19 levels. However, re-imposition of lockdowns in a few states could have some negative effect.
Nevertheless, it is unlikely for the weak mix in Q1 FY21 (low cigarette proportion to total sales) to be repeated, and impact on margins to be as sharp as in Q1 FY21.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the brokerage and do not represent the views of BloombergQuint.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
As a Subscriber you get
Stories
RECOMMENDED FOR YOU
POPULAR