New Delhi: ITC’s 2Q FY22 was ahead of estimates with EBITDA and PBT growing 13 percent year-on-year (YoY), Credit Suisse said in a report.
Net cigarette revenue grew 10.3 percent YoY as the recovery post the second Covid-19 wave has been rapid. Cigarette volumes were back to near pre-Covid levels towards the end of the quarter. Cigarette EBIT also grew 10.4 percent YoY as margins were stable.
FMCG business had a very high base due to the surge in packaged foods in 2Q FY21, and thus revenue growth was muted at 3 percent YoY.
EBITDA margin was maintained at 10 percent despite high input cost inflation from edible oils and packaging material. Hotels turned EBITDA positive while the paper and agribusiness also had good quarters with 24 percent/16 percent YoY EBIT growth, respectively. Investor focus is expected to shift to the deliberations of the expert committee to build a road map for cigarette taxation. We continue to see positive risk-reward. Maintain Outperform” Credit Suisse said,
FMCG business maintains a 10 percent EBITDA margin despite high input cont inflation The two-year revenue CAGR over 2Q FY20 was, however, strong at over 10 percent. The EBITDA margin was maintained at 10 percent despite high input cost inflation from edible oils and packaging material.