ITC Q3 today: Demonetisation, cigarette sales key triggers

Analyst expected muted results from ITC Ltd today as the shares of ITC were trading at Rs 264 per piece on  BSE, down by 0.51%.

The company is likely to be affected by demonetisation. 

In the previous quarter (Q2FY17), the company registered net profit of Rs 2,500 crore, which was up by 10.5% from Rs 2,262.5 crore in the corresponding period of the previous year. 

A Kotak Institutional Equities report said, , "We estimate cigarette EBIT to decline marginally by 0.5% and overall EBITDA due to dip 6% yoy due to weak leverage."

During Q2, operating profit (EBITDA) from the cigarette business recorded growth of 8.35% yoy to Rs 3,216.88 crore, while revenue jumped 7.09% to Rs 8,528.47 crore. 

That time, ITC said in a statement, its cigarette sales continued to face pressure from contrabands.

Analysts added, "We model 5% yoy volume decline in cigarettes and 1% yoy growth in FMCG business; among other businesses, we model -15%, 5% and -7% growth in hotels, agri-business and paper boards respectively."

Kotak expects ITC to report revenue Rs 8,757.4 crore down by 0.4% on year-on-year (YoY) basis and 8.2% on quarter-on-quarter (QoQ) basis. 

While profit after tax is estimated to be around Rs 2,405.7 crore, declining by 3.9% yoy and 3.8% qoq. 

Recently, ITC named Sanjiv Puri as its chief executive with effect February 5, when chairman YC Deveshwar will move to a non-executive role.