ITC Q4 Review - FMCG Profits, Cheap Valuations Limit Downside: Prabhudas Lilladher
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Prabhudas Lilladher Report
We are increasing ITC Ltd.'s FY22/23 earnings per share estimates by 3.7-4.5% given recovery in cigarette volumes, pick up in leaf tobacco and agri exports and 8.9% fast moving consumer goods Ebitda margins in FY21.
We believe lockdowns are temporary hiccups and expect smart pickup post Q1.
We believe stable cigarette taxation and FMCG profitability are key positives in near term.
We expect agri profitability to improve given strong surge in commodity prices and revival in leaf tobacco demand (20% plus margins).
Hotels business remains under cloud but global trends suggest significant pick up in travel in H2 FY22.
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