- 19 May 2022
- ICICIdirect Research
ITC posted Q4FY22 results
ITC - 520 Change: 5.15 (1.00 %)News: Revenue witnessed growth of 16% to Rs. 16426 crore (I-direct estimate : Rs.17198 crore) on the back of 10% growth in cigarettes, 31.8% growth in paperboard, 29.6% growth in agri & 12.3% growth in FMCG businesses. Hotels business also saw strong recovery with 35.4% growth but still remains lower than pre-Covid revenues. FMCG sales growth of 12.3% was led by strong growth in education & stationary segment due to re-opening of schools & sustainable growth in staples. Operating profit rose 16.8% to Rs. 5224.4 crore (I-direct estimate : Rs.5303.3 crore). Net profit grew 11.8% to Rs. 4191 crore (I-direct estimate : Rs. 4148 crore). The company declared a final dividend of Rs. 6.25/share. Along with the interim dividend of Rs. 5.25/share, total dividend was at Rs. 11.5/share, which is 4.3% dividend yield
Views: ITC has seen a strong recovery across segment from two years of disruption from Covid. Cigarette volumes have been growing at pre-Covid levels and the company has gained market share in the segment in last one year. Further, despite huge commodity inflation, the company has been able to improve its operating margins in the quarter & FY22. We believe ITC is least impacted by commodity inflation given its raw material consist larger proportion of wheat & other agri commodities, which have seen relative less volatility compared to crude & palm oil derivatives. The company has generated strong Rs. 13000 crore free cash flow in FY22 & dividend payout is close to 90%. With the stable taxation on cigarettes & its strategy of improving FMCG business segment margins is expected to work well, going forward
Impact: Positive