ITC, the FMCG giant known for its cigarettes and Aashirvaad atta, recently declared its Q4 results for FY24. While analysts anticipated muted growth, the actual figures paint a picture of a company navigating a challenging environment, particularly in its core cigarette business.
Key Takeaways From ITC Q4 Results
Flat Profit: Analysts’ predictions of flat profit growth seem to be on point. Compared to the same quarter last year, profits are expected to be marginally higher, around 0.6%.
Muted Cigarette Volumes: As predicted by analysts, cigarette sales volume is expected to show minimal to no growth year-on-year. This is likely due to factors like government regulations, rising taxes, and anti-smoking campaigns.
Mixed Performance in Other Segments: The picture outside cigarettes is a bit brighter. Segments like Hotels and FMCG (excluding cigarettes) are expected to continue their positive performance. However, the Paperboards segment might see continued weakness.
Breaking Down the Segments
Cigarettes: Undoubtedly the major contributor to ITC’s revenue, this segment faces headwinds. While the exact figures are yet to be released, analysts predict stagnant sales volume. This could be attributed to increasing health consciousness, stricter regulations, and the rising cost of cigarettes due to taxation.
Hotels: A bright spot, the Hotels segment is expected to show continued growth. The rebound in domestic and international travel bodes well for ITC’s hotel chains like ITC Maurya and WelcomHotels.
FMCG (excluding cigarettes): Another positive contributor, this segment includes popular brands like Aashirvaad, Sunfeast, and Bingo. Continued demand for these products is likely to drive growth.
Paperboards: This segment might experience continued weakness, as analysts predict no significant improvement.
What to Watch Out For
Final Results: The official announcement of ITC’s Q4 results is still awaited. The final figures might differ slightly from analyst predictions.
Dividend Announcement: Along with the results, ITC is expected to announce its final dividend for FY24. Investors will be keenly watching this figure.
Management Commentary: ITC’s management might provide insights into their strategies for navigating the challenging cigarette market and driving growth in other segments.
Overall, ITC Q4 results seem to be a tale of two sides. While the core cigarette business faces stagnation, other segments offer a ray of hope. Whether ITC can find ways to reignite growth in cigarettes or compensate with strong performance in other areas will be crucial for its future trajectory.
