ITC gains on hopes of strong Q3 earnings

The board will meet on January 18 to consider and approve the un-audited financial results for the quarter and nine months ended December 31, 2012.

ITC has moved higher by 2% at Rs 284 in noon deals in otherwise subdued market on hopes of strong earnings growth during the third quarter ended December.

The FMCG (fast moving consumer goods) company said that its board will meet on January 18 to consider and approve the un-audited financial results of the company for the quarter and nine months ended December 31, 2012 (Q3FY13).

In Q2 (July-September) quarter, the company had posted a 21.27% year-on-year (YoY) jump in quarterly net profit at Rs 1,836 crore, largely in line with expectations.

ITC would witness a recovery in cigarette volume growth during the third quarter despite the steep price hikes initiated by the company.

 

Analyst at Sharekhan expects ITC’s top line (including the other operating income) to grow by 14.1% YoY in Q3 driven by a realization led growth in the cigarette business and a sustained strong growth (above 20% YoY) in the non-cigarette FMCG business.

ITC’s operating profit margin (OPM) is expected to improve by 46 basis points YoY to 38.6% in Q3FY2013. The operating profit and net profit are expected to grow by about 15% each YoY during the quarter at Rs 2,381 crore and Rs 1,701 crore respectively.

The stock opened at Rs 280 on NSE and has seen a combined 4.63 million shares changing hands on the counter so far on both the exchanges.