ITC hits a new low

The overall negative sentiment seems to have percolated down to ITC, which despite having posted good numbers, meeting and even surpassing estimates, the stock price is down in the red. In fact the stock hit a new 52-week low today at Rs.258.35, going down almost 2.5% and it continues to hover around the same levels.

ITC, for Q1FY20 , the company posted a steady performance during the quarter amidst sluggish demand conditions. Gross Revenue for the quarter stood at Rs. 11361 crores, representing a growth of 6%, driven mainly by Paperboards, Hotels and FMCG-Others (excluding the Lifestyle Retailing Business).

Profit after Tax was at Rs. 31734 crore, grew by 13%. Total Comprehensive Income stood at Rs. 2961 crore (previous year Rs. 2897 crore). Earnings Per Share for the year stood at Rs. 2.59 (previous year Rs. 2.31).

Its main fray remains cigarette and for the quarter, it accounted for as much as 86% of the company’s overall EBIT. The cigarette business EBIT increased by 8% (YoY).

Hotels Segment Revenue up 15% driven by robust performance of new properties, amidst relatively soft demand conditions. While Segment EBITDA grew 18%, additional depreciation pertaining to new properties weighed on Segment Results. ITC Royal Bengal, Kolkata commissioned on 1st June 2019, has received excellent initial response.

Paperboards, Paper & Packaging Segment Revenue was up 13%, driven by strong growth in Value Added Paperboards segment and product mix enrichment. Packaging & Printing Business, however, was impacted by slowdown in the FMCG industry and exports.

In the Agri Business segment, subdued demand for leaf tobacco in international markets, steeper depreciation in currencies of competing origins in recent years, limited trading opportunities in Oilseeds & Pulses and adverse business mix weighed on the segment results.