InvestorQ : How did you find the ITC results for the quarter and is the rally justified in the stock?
Arya Nanda made post

How did you find the ITC results for the quarter and is the rally justified in the stock?

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Anjana Aiyar answered.
9 months ago
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A quick word on the rally first. The rally has bene going even before the results and it has been one of the few stocks rising in the frontline stocks. That is more as a defensive cigarette bet and also due to the stock not doing anything in the last 2 years when all other stocks had rallied sharply. Top line numbers were still good. For instance, sales revenues for Q4FY22 were up by 15.43% at Rs16,556 crore on a consolidated basis.

ITC Ltd

Rs in Crore

Mar-22

Mar-21

YOY

Dec-21

QOQ

Total Income (Rs cr)

₹ 16,555.53

₹ 14,342.27

15.43%

₹ 17,108.16

-3.23%

Net Profit (Rs cr)

₹ 4,195.69

₹ 3,755.47

11.72%

₹ 4,056.73

3.43%

Diluted EPS (Rs)

₹ 3.40

₹ 3.05

₹ 3.29

Net Margins

25.34%

26.18%

23.71%

  

A little more on the top line growth story first. Full year FY22 revenues were up 22.3% at Rs64,618 crore for ITC. For Q4FY22, ITC saw robust sales growth across all the key verticals viz. cigarettes, non-cigarette FMCG products, hotels, agri business and paperboards vertical. Fairly against the norm in the quarter, the cash from operations improved in FY22 to Rs15,776 crore largely helped by sharply lower funds locked up in inventories.

Now for the profit story of ITC. Net profit for Q4FY22 was up 11.72% at Rs4,196 crore. Cigarettes EBIT grew 11.9% yoy at Rs4357 crore, FMCG EBIT grew 30.4% at Rs239 crore, Agri business EBIT grew 31.9% at Rs244 crore and Paperboards EBIT grew 39.3% at Rs450 crore. The contact sensitive Hotels vertical saw operating losses. Net margins were 25.34% in Q4FY22 against 26.18% in Q4FY21 and 23.71% in Q3FY22. The final dividend of Rs.6.25 per share takes total dividend to Rs11.50 for the year, making a good dividend yield play.

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