ITC Q1 Review - Cigarettes Recovery Tepid, FMCG Margins Shine: Prabhudas Lilladher
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Prabhudas Lilladher Report
We are marginally decreasing FY22/23 earnings per share estimates of ITC Ltd. by 2%/1.2% on account of lower other income which halved during Q1.
Cigarette volumes recovery has been impacted due to restrictions in Kerala, Odisha and North East and recovery is expected to be slower than expected.
Fast moving consumer goods margins have seen benefit of higher scale, rigorous cost control, closer to market production units and rising direct coverage and trend is expected to continue.
Paperboard has gained margins in inflationary input cost scenario due to backward integration and medium term outlook remains intact.
We expect hotels business recovery to be delayed due to the second wave however traction at leisure locations bodes well for ITC.
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