ITC Ltd. share price target

Revenue fell by 10.21% to Rs. 9876.45 Cr in Q1FY18 when compared Revenue fell by 10.21% to Rs. 9876.45 Cr in Q1FY18 when compared

ITC commands high operating margin of 36%, along with core RoCE of ~40%. We have BUY rating with a TP of Rs 353, based on 32x Jun-19EPS. ITCs gross revenue was up 4.3% YoY at Rs 137bn (our expectation 3.4%). EBITDA/PAT grew 6.2%/7.4% YoY respectively, in-line with our expectations. Revenue growth was healthy, considering destocking pressure. Cigarette business registered healthy revenue/EBIT growth of 6.6%/9.0% respectively (5%/6.4% expectation). We believe cigarette volumes grew by ~1%. Non-cigarette business remained slow, with revenue/EBIT growth of 3.5%/4.5% respectively

ITC reported decent set of numbers for the quarter with revenue growth of 4.3% YoY to | 13722.2 crore, broadly in-line with our estimate of | 13669.4 crore. Cigarette grew 6.6% YoY, FMCG & hotel segments grew 9.0% and 6.1% YoY Cigarette volumes remained muted (~1% volume growth recorded), growth was primarily led by price hikes undertaken in previous quarter post budget. Additionally thin trade pipeline restricted any major plunge in cigarette volumes ahead of GST implementation....

Cigarettes do well before moving on to the GST regime ITC has reported a decent set of numbers for 1QFY18. Although revenues fell by 0.8% YoY to Rs98.7bn, EBITDA increased by 7% YoY to Rs36.7bn (vs. our estimate of Rs37.3bn) and net profit surged by 7.4% YoY to Rs25.6bn (vs. our estimate of Rs26bn). Its core Cigarettes business...

ICICI Securities Ltd | Retail Equity Research In the review meeting of the GST Council on tax rates, the council has raised the specific cess on cigarettes in all categories below 75 mm. Also, it has sharply increased the ad-valorem rate in above 75 mm category. We believe this would increase the blended tax incidence per stick from | 3.2 to | 3.9, resulting in more than | 5000 crore excess tax burden for the industry compared to earlier GST rates or | 3800 crore excess burden compared to pre-GST regime. We believe ITC would need to take a price...

With the clarity emerging on new indirect tax rates on cigarettes, we believe net tax incidence on ITC would come down by 4.5% mainly due to elimination of cascading effect of taxes. Considering anti profiteering clause in place cigarettes prices are likely to come down by 2.5%. After five consecutive year of increase in duties & taxes on cigarettes, GST implementation has come as advantage for cigarettes companies. We believe the company would continue to concentrate on low priced (64 & 69 mm) cigarettes to derive higher volume growth. Notably 64 mm...

The neutral GST rate augurs well for cigarette volumes & hence, we upgrade our rating from HOLD' to BUY' with a revised TP of Rs336 based on 30x FY19E P/E. Cigarette volumes were ahead of estimates While ITC's gross sales grew by mere 6% YoY in Q4FY17, net sales grew by healthy 14% YoY driven by 11% drop in excise duty outgo this quarter. Notably, the base quarter witnessed higher excise as inventory rose in the system ahead of pictorial warning implementation. Cigarettes business (contributes ~50% to revenues) registered a growth of 4.8% YoY led by realisation growth on account of price hikes undertaken by ITC post excise...

Revenue rose by 20.3% to Rs. 11125.54 Cr in Q4FY17 when compared to the previous quarter.

ITCs gross revenue was up 6.2% YoY at Rs 150bn, slightly lower than our expectation of 7.2%. EBITDA/APAT grew 7.5%/12.1% YoY respectively, in-line with our expectations.

While the specific GST on cigarettes was fixed at 28%, the cess quantum was notified today at 95% of existing specific duty slab + 5% ad valorem rate. As per management, there is still no clarity on how the rate calculation will happen.