Anlaysts See Itc Net Around Rs 975 Crore

The market is expecting ITC Ltd to clock a net profit of around Rs 975 crore, and a slim growth of volumes, if any at all, in 2000-01. This would translate into an earning per share of about Rs 40.

The company, which will announce its annual results tomorrow, posted a net profit of Rs 792.44 crore in 1999-2000. A net profit in the region of Rs 975 crore, as expected by analysts, would mean a growth of around 23 per cent in the 2000-01 fiscal.

Despite expectations of flat volumes, there should be a double figure growth in the company's topline, analysts said. The company's total income in the last fiscal was Rs 8,069.37 crore.

"The growth this fiscal would be largely due to the increase in prices of popular brands, which again is responsible at least partially for the drop in volumes," a leading analyst with Motilal Oswal Securities, Mumbai, said.

In the nine months ended December 31, 2000, the company had registered a total income of Rs 6,567.29 crore, and a net profit of about Rs 710 crore.

Despite expectations of a decent performance, the market is not much enthused. Analysts feel the company may report a shrinkage of volume in the first quarter of the current fiscal, largely on account of inflow of imported cigarette brands.

What might also affect the company's sales in the long run was the government's proposed ban on advertising and sponsorship by tobacco companies, analysts said.

The ITC stock has been declining steadily for over a month. In the recent past it touched a high of Rs 878.65 on April 23. In the last one month, the ITC has depreciated by Rs 59.15. Today, it close at Rs 778 on the Bombay Stock Exchange (BSE).

Lack of interest in the counter is further indicated by the fact that trading volume has been in the region of couple of lakhs on BSE in the last one month. Prior to the company's results tomorrow, volume spurted to over 4.68 lakh today on BSE, yet the stock gained only Rs 3.45.

Though not much importance is being paid by the market as yet to ITC subsidiary Russell Credit's counter offer for 20 per cent VST Industries, the country's second largest cigarette manufacturer, analysts expect it to lead to consolidation in the industry, which in turn should help ITC strengthen its own business.