ITC Ltd. share price target

ICICI Securities Ltd | Retail Equity Research The government announced a 6% hike in excise duty across categories of cigarette against our assumption of 10% hike for FY18. We believe this would translate into nominal price hike requirement of ~3.0% by the company in order to pass on the additional burden from the hike. However, in the backdrop of subdued cigarette volumes due to steep excise hikes in the past years and recent disruption in the segment due to demonetisation, we believe the company may not take usual 8-10% price...

ITC?s net revenue was up by 4.1% YoY to Rs 91.5bn, slightly ahead of our expectation. EBITDA & APAT grew by 2.1% & 5.7% YoY. Revenue growth was healthy considering general demand trends were weak after demonetisation. Cigarette business registered 2.2% growth (7% growth in 1HFY17) led by flat cigarette volume. Liquidity crunch and higher illegal trade impacted cigarette performance.

ICICI Securities Ltd | Retail Equity Research ITC reported revenue growth of 4.5% YoY to | 13471 crore, above our estimate of | 12599 crore. Cigarette business grew marginally by 2.2% YoY due to the demonetisation. Agri business grew 12.9% YoY followed by hotel business, which grew 7.3% YoY. FMCG segment...

For 3QFY2017, ITC has reported below estimates numbers, both on the top-line and bottom-line fronts, on the back of lower Cigarettes volume growth due to demonetization of Indian currency. However, healthy growth was witnessed in other businesses like Hotels, Agri Business, etc. We expect ITC to report top-line and bottom-line CAGR of 9% ..

ITC posted a healthy set of numbers for 2QFY2017, both on the top-line and the bottom-line front. The top-line was healthy due to decent growth in cigarettes and other FMCG businesses, which resulted in a higher overall profitability of the company. We expect ITC to report a top-line and bottom-line CAGR of 10% and 15%, respectively, over..

ITCs net revenue was up by 9.6% YoY to Rs 96.6bn, in line with our expectation of 9.5% growth. EBITDA & APAT grew by 7.3% & 10.5%. Revenue growth was healthy led by cigarette & FMCG segments. Cigarette business grew by 7.1% with improved volume growth of ~3.5%. Non-cigarette business growth remained slow at 6.1% growth.

ICICI Securities Ltd | Retail Equity Research ITC reported 7.8% YoY growth in revenue for Q2FY17 to | 13491.4 crore (I-direct estimate: | 14,288.7 crore). The company witnessed 7.1% YoY growth in cigarette business. FMCG segment grew strongly by 13.3% YoY largely driven by volumes supported by brand building and consumer/trade promotion activities. Hotels & agri business grew moderately by 2.5% and 2.0%, respectively; however, paperboard remained flat...

GST implementation may lead to a levy of a sin tax of 40% on cigarettes in addition to the prevailing excise duty structure. The sin tax will replace the state VAT which is currently at 26.5% on a blended basis as per our estimates. This hike is significant and it will have a significant impact on the cigarettes business volume and profit growth. While the impact is significant, we find ITC is preparing ground for GST implementation by taking calibrated price hikes and steadily increasing the share of sub-65mm cigarettes. Post the implementation of GST, the profit growth trajectory for ITC will improve significantly as GST will remove various distribution inefficiencies. We maintain our Buy recommendation on ITC with a target price of Rs 300 after baking in the negative impact of GST implementation starting from FY18.

Q1FY17 was marked by a challenging operating environment due to continuing pressure on legal cigarettes industry volumes and sluggish demand conditions in FMCG Due to lack of clarity on new rules pertaining to health warnings on the packs, ITC's cigarette factories were shut from 1st April to 15th April 2016 and from 4th May to 8th May 2016 this impacted production Our channel checks suggest that in Maharashtra (~10% of sales volume), seizure of...

ICICI Securities Ltd | Retail Equity Research ITC reported revenue growth of 8.3% YoY to | 13156.7 crore for Q1FY17. Adjusting for the impact of Ind AS, revenues stood at ~| 9957.7 crore (I-direct estimate: | 9679.4 crore). The company saw robust growth of 20.2% in agri business while cigarette business grew by 6.4%. In FMCG, 9.5% growth was largely driven by volumes. However, hotels & paperboard segments reported subdued performance with de-growth of 0.2% & 1.6% respectively...