ITC :: 2QFY2012 results review: Angel Broking

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ITC
ITC declared top-line growth of 17.5% yoy to `5,974cr (`5,083cr), in-line with our
estimates. For the quarter, the cigarette division registered 21.5% growth in gross
revenue (16.4% yoy growth in net revenue) on the back of better realizations.
Amongst other segments, at the net level, agri-business, paperboards and
packaging and hotels posted growth of 14.8% yoy, 9.4% yoy and 1.1% yoy,
respectively, while non-cigarette FMCG business grew by robust ~27% yoy.
Earnings for the quarter grew by robust 21.5% yoy to `1,514cr (`1,247cr),
marginally above our estimates. The company has been successful in reducing its
losses in the non-cigarette FMCG business – loss during 2QFY2012 stood at
~`56cr (`67cr). Earnings for the quarter grew by robust 21.5% yoy to `1,514cr
(`1,2478cr), in-line with our estimates. The company reported marginal margin
expansion (up by 11bp yoy) in its operating profit despite gross margin contraction
of 221bp yoy by reducing staff costs and other expenses. The stock is under
review.