ITC Q3 net profit rises 4% YoY to Rs 3,209 crore; stock dips 4.75%

FMCG major ITC posted a 3.84 per cent YoY rise in its net profit at Rs 3,209.07 crore for the quarter ended December 31, 2018. It had posted PAT of Rs 3,090.20 crore in the corresponding quarter of last financial year.

For the nine months ended on December 31, 2018, the figures stood at Rs 8982.42 crore.

Total income from operations for the quarter under review came in at Rs 12,267.65 crore, up 15.79 per cent against Rs 10,594.55 crore in the year-ago period. 

Basic earnings per share (EPS) for the period was Rs 2.62 against Rs 2.54 last year. Segment wise, total revenues from FMCG space stood at Rs 8,274.36 crore against Rs 7,500.97 crore in the year-ago quarter. 

PREVIEW: Here's what analysts had expected

ITC’s net revenue (net of excise duty) increased by 14.9 per cent YoY to Rs 11,227.7 crore. Cigarette, FMCG, Agri business, Paperboard and Hotels business witnessed a growth of 9.6 per cent, 11.5 per cent, 25.7 per cent, 20.5 per cent and 11.7 per cent, respectively. We believe cigarette volume growth is nearly 5 per cent, said ICICIdirect in post results note.

"Overall, the results are in line with our expectations in terms of revenue and slightly below expectations in terms of margin," said an analyst at Anand Rathi in a post result note.

The stock ended 4.75 per cent lower at Rs 276 apiece on NSE.

"ITC currently trades at 26x and 23x FY20E and FY21E EPS. The sector Ex-ITC is trading at nearly 40x FY20E EPS, implying an unfair discount of 38 per cent. We're encouraged by healthy operating performance reported during the quarter despite punitive taxes. We have a BUY rating with target price of Rs 383," wrote  Naveen Trivedi, and Siddhant Chhabria of HDFC Securities in an emailed note.