ITC’s numbers for Q3FY21 were on expected lines with cigarettes business reporting 92% recovery in net sales and EBIT, marginally ahead of estimates.
Chirag Batavia • 19 April 2021
ITC Ltd
- ITC’s numbers for Q3FY21 were on expected lines with cigarettes business reporting 92% recovery in net sales and EBIT, marginally ahead of estimates.
- In 9MFY21, ITC introduced health soaps, disinfectant sprays, body wash, wipes and masks under Savlon brand. It remains to be seen how ITC capitalizes on this and scales up.
- For Q4FY21, we expect 9% yoy growth in cigarette volumes, 14% yoy growth in cigarette gross sales with 5% price-mix impact. We forecast 10% yoy growth in cigarette EBIT.
- In the FMCG portfolio for Q4FY21, we expect sequential demand trends to hold, with some moderation in health & hygiene portfolio and recovery in discretionary segment. We model 15.2%/70% yoy growth in FMCG revenue/EBIT.
- ITC offers a good combination of inexpensive valuations, healthy dividend yield and the promise of solid Long term growth in FMCG.
ITC Ltd: BUY
Dated: 19 th April 2021
CMP: Rs.208
Fair Value: Rs.265
Potential Upside: 27.4%
Market Cap: Rs.256,046 Cr
Time Frame: 12 months
Note: The above is a brief note on the company, based on the inputs of a KIE research report dated 12 th February 2021 & Strategy Preview Report dated 7 th April 2021, which is available on our website at: https://www.kotaksecurities.com/ksweb/ResearchCall/Fundamental . Disclaimer: http://bit.ly/2n5AxIE
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Home First Finance (HOMEFIRST) Home First remains consistent on operational and financial parameters. Home First (HFFC) reported 24% earnings growth, with 19% net interest income growth in Q2FY25. Gross stage-3 ratio was flat qoq at 1.7%, stage-2 ratio declined 6 bps qoq to 1.1%. While other asset classes have reported mixed trends residential home loans, as an asset class, continues to stand tall. Home First, with 85% home loan exposure, is well-placed on the above. We expect the company to deliver 25% earnings CAGR for FY25-27E. We remain assertive with a BUY rating and FV of Rs1,360 (no change). Note: The above is a brief note on the company, based on the inputs of KIEresearch report dated 25111Oct, 2024, which is available onour website at: https://www.kotaksecurities.com/ksweb/ResearchCall/Fundamenta1. Disclaimer: http://bit.ly/2n5Ax1E https://www.kotaksecurities.oom/ksweb/research/kotak-research-reports/top-weekly-picks
