Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
M o d e r a t e v o l u m e g r o w t h , r i s e i n o t h e r i n c o m e . . .
ITC posted strong results with ~22.5% growth in earnings in Q3FY12. Net
sales witnesses 13.6% growth YoY to | 6195.4 crore led by ~11% growth
in cigarettes and 24.5% growth in the FMCG business. Cigarettes and
FMCG constitutes ~74% of the total sales. EBITDA margins expanded by
200 bps to 38.4% compared to 36.4% in Q3FY11. Other income increased
by 47.7% to | 285.1 crore mainly on account of treasury income. Strong
EBITDA growth and higher other income resulted in a 22.5% increase in
net profit to | 1701.0 crore.
ƒ Segmental results
Cigarette revenues grew 11% to | 5809 crore on the back of strong
volume growth of ~5% and ~5.7% price led growth. The steep price
hike of ~10% in most categories resulted in volume growth moderating
from ~7% in H1FY12 to ~5% in Q3FY12. We believe ITC will witness
volume growth of ~5% in Q4FY12 and FY13. The FMCG business
witnessed 24.5% growth in sales led by almost ~15-17% volume growth
in the food segment of the FMCG business. The hotel business
witnessed 2.5% growth in sales led by marginal improvement in average
room rates (ARR).
V a l u a t i o n
Currently, the stock is trading at 25x its FY12E EPS of | 8.0 and 21x its
FY13E EPS of | 9.4. We believe a continuous reduction in FMCG losses
and sustained growth in the cigarettes business (mainly led by price
hikes) would continue to drive bottomline growth and expand overall
margins in FY13E. However, due to moderate volume growth in
cigarettes, we are changing multiples for the cigarettes business from 26x
P/E to 25x P/E. Simultaneously, the risk of a steep increase in excise duty
would remain an overhang on the stock till the 2012 Budget. We have
valued the stock on an SOTP basis and arrived at a fair value of | 230.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
M o d e r a t e v o l u m e g r o w t h , r i s e i n o t h e r i n c o m e . . .
ITC posted strong results with ~22.5% growth in earnings in Q3FY12. Net
sales witnesses 13.6% growth YoY to | 6195.4 crore led by ~11% growth
in cigarettes and 24.5% growth in the FMCG business. Cigarettes and
FMCG constitutes ~74% of the total sales. EBITDA margins expanded by
200 bps to 38.4% compared to 36.4% in Q3FY11. Other income increased
by 47.7% to | 285.1 crore mainly on account of treasury income. Strong
EBITDA growth and higher other income resulted in a 22.5% increase in
net profit to | 1701.0 crore.
ƒ Segmental results
Cigarette revenues grew 11% to | 5809 crore on the back of strong
volume growth of ~5% and ~5.7% price led growth. The steep price
hike of ~10% in most categories resulted in volume growth moderating
from ~7% in H1FY12 to ~5% in Q3FY12. We believe ITC will witness
volume growth of ~5% in Q4FY12 and FY13. The FMCG business
witnessed 24.5% growth in sales led by almost ~15-17% volume growth
in the food segment of the FMCG business. The hotel business
witnessed 2.5% growth in sales led by marginal improvement in average
room rates (ARR).
V a l u a t i o n
Currently, the stock is trading at 25x its FY12E EPS of | 8.0 and 21x its
FY13E EPS of | 9.4. We believe a continuous reduction in FMCG losses
and sustained growth in the cigarettes business (mainly led by price
hikes) would continue to drive bottomline growth and expand overall
margins in FY13E. However, due to moderate volume growth in
cigarettes, we are changing multiples for the cigarettes business from 26x
P/E to 25x P/E. Simultaneously, the risk of a steep increase in excise duty
would remain an overhang on the stock till the 2012 Budget. We have
valued the stock on an SOTP basis and arrived at a fair value of | 230.
No comments:
Post a Comment