ITC Q1 Review - Regional Lockdowns Impact Cigarette Recovery; FMCG On Track: Systematix
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Systematix Research Report
ITC Ltd.’s Q1 FY22 performance was largely in-line with expectations with regional lockdowns impacting cigarette business recovery.
Cigarette volumes grew 32% y-o-y on a favourable base of a 40% y-o-y decline.
On a two-year basis, cigarette volumes declined 11% in Q1 FY22 versus a 1.4% decline in Q4 FY21.
ITC's cigarette Ebit declined by 12.2% q-o-q and 8.5% on a two-year compound annual growth rate basis.
Despite the regional lockdowns, fast moving consumer goods revenues (including Sunrise) remained resilient, with recovery in demand trends since June 2021, and grew by 10.4% y-o-y (on a base of up 10.3% y-o-y).
Travel restrictions in the second wave impacted the recovery in the hotels business, which declined by 55.8% q-o-q.
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