ICICI Direct: ITC’s Double Digit FMCG Margins In Sight
A vendor hands over a pack of bidi cigarettes to a customer, unseen, at a street stall in Kannauj, Uttar Pradesh, India (Photographer Udit KulshresthaBloomberg)

ICICI Direct: ITC’s Double Digit FMCG Margins In Sight


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.

ICICI Direct Report

ITC Ltd. reported 17.4% decline in sales with cigarettes revenues seeing degrowth of 29.1%. The volume dip of 40% was better than our expectation given 45 days business loss. We believe trade (distributor, retailers) inventory would have depleted during lockdown despite retail shops staying closed. Preferred pack buying over loose cigarettes also helped restore volumes.

These factors would have helped company to refill trade pipeline given manufacturing and supply chain operations normalised in June. The trade normally holds 14 days inventory.

Comparable FMCG sales grew 12.2% with strong demand in staples, packages foods and hygiene product and steep decline in discretionary and stationary businesses. Operating margins contracted 1184 basis points mainly impacted by negative operating leverage and excise hike earlier in budget. Net profit de-grew 26.2%.

Click on the attachment to read the full report:

ICICI Direct ITC Q1FY21 Result Review.pdf


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.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.