ITC Q1 Review - Operational Performance In Line: Dolat Capital
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Dolat Capital Report
ITC Ltd.’s Q1 FY22 revenue and Ebitda was in line with our estimates, adjusted profit after tax was below estimates.
Cigarette business posted revenue growth of 32.9% on a base of 29% decline, in line with our estimate, with volume growth of 31-32%.
However, on a two year basis, volumes are still down ~14%.
A 170 basis points expansion in cigarette margin indicates improved product mix. Easing of restrictions from June 2021 led to faster recovery versus first wave, boosts our confidence.
However, wide availability of smuggled cigarettes, will continue to pressurise ITC's volume growth going ahead.
Fast moving consumer goods business exhibited strong 10.4% revenue increase in Q1 FY22
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