ITC hits new high

The stock has outperformed the market by surging 17% from its recent low of Rs 314 on June 24, against 7.5% rise in Sensex and 12.7% gain in FMCG index.

ITC is trading higher by 1.3% at Rs 365, extending its previous day’s 2.3% gain on the Bombay Stock Exchange (BSE).  The stock opened at Rs 360 and hit a record high of Rs 366.

Shares of the fast moving consumer goods (FMCG) company has outperformed the market by surging 17% from its recent low of Rs 314 touched on June 24 after the company hiked the prices of Gold Flake, its largest selling cigarette brand by over 7%. The benchmark Sensex has gained 7.5%, while FMCG index rose 12.7% during the same period.

Meanwhile, ITC is schedule to declare its April-June (Q1 FY2014) quarter earnings on July 25.

Analyst on an average has expected ITC to report 17% year-on-year (yoy) growth each in net profit and net sales in Q1FY2014.

“We expect 18% yoy growth sales growth in ITC’s cigarette segment revenues, and estimate the other FMCG business revenue growth at 22% yoy. EBITDA growth will be led by cigarettes and margin swing in the other FMCG business,” says analyst at Kotak Institutional Equities Research.

“We expect the EBITDA margin to move up 40bps and expect the 1% volume growth in cigarettes to drive up the margin. The effective tax rate would be up 60bps; net profit could grow 23% yoy,” says Aniruddha Joshi, analyst at Anand Rathi Research in a report.