ITC Q3 results analysis

Last updated: 12 Feb, 2021 | 12:11 pm

ITC Q3 results analysis

Revenue rises: ITC's total revenues increased 5% on-year to Rs 12,580 crore in Oct- Dec 20 period, in line with street estimates. Analysts were earlier expecting a revenue of about Rs 12,000 crore. Cigarette business, which contributes to 43% on overall revenue, grew 3.5% on-year to Rs 5,498 crore.

Profit meets estimates: ITC's net profit declined 12% on-year to Rs 3,662.8 crore in the quarter ended December. Analysts had earlier anticipated a net profit of about Rs 3,610 crore.

Segment-wise performance: 

Health & Hygiene Business 

The FMCG-others segment has posted a robust growth in the period, as demand for health & hygiene products remained elevated and discretionary 'out-of-home' consumption products witnessed smart recovery buoyed by pent-up demand.


Cigarette volumes and revenue posted sequential recovery led mainly by metros and large towns amid easing of pandemic-induced restrictions and enhanced mobility. However, availability of smuggled cigarettes remains a key challenge for the legal cigarette industry. Further, the 3% tax hike effective from February last year continues to weigh on industry volumes.


The agri-business posted a robust growth of 18.5% in Segment Revenue driven by higher wheat supplies for Aashirvaad atta and trading opportunities in rice, soya and wheat exports, according to ITC.

Paper & Paperboards

Volumes recovered sequentially in the quarter, led by exports. Softer realisation have led to lower revenue growth, even though consumer offtake improved across most major segments.


Hotel business continues to remain impacted, while there has been sequential recovery, the revenues and profits remain below pre-Covid levels. 

Dividend: The company has declared an interim dividend of Rs 5 per share. Feb 23rd has been fixed as the record date, while March 10th would be the payment date. 

Share price performance: The company has witnessed a rally post Union Budget on Feb 1, as brokerages remained upbeat on the stock, due to no increase in 'Sin Taxes' this year. According to Credit Suisse, ITC is now a COVID recovery play, as cigarette volumes are likely to improve consistently.

Outlook post results

Citi maintains Neutral

Global brokerage firm Citi noted that Cigarette trends are better than what was feared earlier, even as FMCG-others continue to moderate. Possible news relating to changes in regulations would be key to watch. The firm has maintained a ‘Neutral’ rating on the stock with a target price of Rs 215.

Credit Suisse maintains outperform

The brokerage firm said that Cigarette recovery augurs well for the upcoming fiscal year. Credit Suisse remains positive on the company, as it sees Cigarette business recovering. It sees potential restructuring and increase in the value of ITC’s FMCG business.

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