ITC’s Q1FY15 results (Y-o-Y) were in line with our estimates. Cigarettes volumes declined for fifth straight quarter by ~2-3%. However, this was on expected lines. Steep price hikes initiated supported the overall growth, which remained in high double digits.
Electrolux Q2 interim report 2019: Good price momentum and focus on innovationElectrolux Group
Highlights of the second quarter of 2019
Net sales amounted to SEK 31,687m (31,354). Sales decline of 2.7%, driven by lower volumes.
Operating income amounted to SEK 1,619m (827), corresponding to a margin of 5.1% (2.6). The comparison period included non-recurring items of SEK -818m.
Price increases fully offset the headwinds from higher raw material costs, trade tariffs and currency as well as lower volumes. Mix improvements mitigated higher investments in marketing and R&D.
Operating cash flow after investments amounted to SEK 384m (1,805).
Income for the period increased to SEK 1,132m (517), and earnings per share was SEK 3.94 (1.80).
The Board has reconfirmed its plan to propose to the shareholders that the Professional Products business area is distributed to the shareholders with the aim to achieve listing on the Nasdaq Stockholm during the first quarter of 2020 or, at the latest, the second quarter of 2020.
Highlights of the second quarter of 2018
Net sales amounted to SEK 31,354m (30,948). Sales growth was 0.7% with organic sales growth across most business areas.
Operating income amounted to SEK 827m (1,919), corresponding to a margin of 2.6% (6.2).
Operating income include costs of SEK 818m, whereof SEK 564m relates to an investigation by the French Competition Authority and SEK 254m to an unfavourable court ruling in France, both impacting Major Appliances EMEA. Excluding these non-recurring items, operating income amounted to SEK 1,645m, corresponding to a margin of 5.2% (6.2).
Higher prices, mix improvements and cost savings contributed positively, however operating income was impacted by higher costs for raw materials and currency headwinds.
Operating cash flow after investments amounted to SEK 1,805m (3,470).
Income for the period decreased to SEK 517m (1,291), and earnings per share was SEK 1.80 (4.49).
ITC Mint-O Marketing and Business development analysisVivek Kapoor
Candies are a fiercely contested space in India, and within Candies, Nestle Polo has a strong hold. Mint-O from ITC positioned itself uniquely targeting niche sensibilities and providing the necessary thrust though its wide network of small cigarette shops. This presentation identifies possible growth areas for the brand.
ITC’s 1QFY15 results were largely in-line though seasonality in Agri revenues resulted in 9.5% beat on sales vs. our estimates. 1Q15 net sales, EBITDA and PAT came in at INR92.5b.
Electrolux Q2 interim report 2019: Good price momentum and focus on innovationElectrolux Group
Highlights of the second quarter of 2019
Net sales amounted to SEK 31,687m (31,354). Sales decline of 2.7%, driven by lower volumes.
Operating income amounted to SEK 1,619m (827), corresponding to a margin of 5.1% (2.6). The comparison period included non-recurring items of SEK -818m.
Price increases fully offset the headwinds from higher raw material costs, trade tariffs and currency as well as lower volumes. Mix improvements mitigated higher investments in marketing and R&D.
Operating cash flow after investments amounted to SEK 384m (1,805).
Income for the period increased to SEK 1,132m (517), and earnings per share was SEK 3.94 (1.80).
The Board has reconfirmed its plan to propose to the shareholders that the Professional Products business area is distributed to the shareholders with the aim to achieve listing on the Nasdaq Stockholm during the first quarter of 2020 or, at the latest, the second quarter of 2020.
Highlights of the second quarter of 2018
Net sales amounted to SEK 31,354m (30,948). Sales growth was 0.7% with organic sales growth across most business areas.
Operating income amounted to SEK 827m (1,919), corresponding to a margin of 2.6% (6.2).
Operating income include costs of SEK 818m, whereof SEK 564m relates to an investigation by the French Competition Authority and SEK 254m to an unfavourable court ruling in France, both impacting Major Appliances EMEA. Excluding these non-recurring items, operating income amounted to SEK 1,645m, corresponding to a margin of 5.2% (6.2).
Higher prices, mix improvements and cost savings contributed positively, however operating income was impacted by higher costs for raw materials and currency headwinds.
Operating cash flow after investments amounted to SEK 1,805m (3,470).
Income for the period decreased to SEK 517m (1,291), and earnings per share was SEK 1.80 (4.49).
ITC Mint-O Marketing and Business development analysisVivek Kapoor
Candies are a fiercely contested space in India, and within Candies, Nestle Polo has a strong hold. Mint-O from ITC positioned itself uniquely targeting niche sensibilities and providing the necessary thrust though its wide network of small cigarette shops. This presentation identifies possible growth areas for the brand.
ITC’s 1QFY15 results were largely in-line though seasonality in Agri revenues resulted in 9.5% beat on sales vs. our estimates. 1Q15 net sales, EBITDA and PAT came in at INR92.5b.
TCS recently reported its Q1FY15 results, which were in line on revenue front & at operating level. However, the net profits were above estimates, aided by higher other income. Buy on dips.
Hindustan Unilever Q2FY15 result in line with estimtaes; buyIndiaNotes.com
HUL’s Q2FY15 results were more or less in line with our estimates with lack of any positive surprises. Volume growth of 5% Y-o-Y was not very encouraging, though it was on expected lines.
Dabur’s (DABUR) 3QFY15 results were mixed, with consolidated sales growth of 9.2% YoY to INR20.7b (est. INR21.7b) and underlying domestic volume growth of 7.4% (est. 9%). EBITDA posted healthy 18.4% growth YoY to INR3.5b (INR3.5b), while recurring PAT grew 16.2% YoY to INR2.8b (est. INR2.8b).
MindTree: Rupee appreciation drags revenue growth during Q1FY15IndiaNotes.com
Onsite pricing was up 2.7%, while offshore pricing declined by 0.5%. In INR terms revenues grew at a slower rate by 2.4% QoQ impacted by rupee appreciation during the quarter. EBITDA grew by 41.5% YoY, but fell by 4.9%.
Introduction to Indian Financial System ()Avanish Goel
The financial system of a country is an important tool for economic development of the country, as it helps in creation of wealth by linking savings with investments.
It facilitates the flow of funds form the households (savers) to business firms (investors) to aid in wealth creation and development of both the parties
Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...Vighnesh Shashtri
In India, financial inclusion remains a critical challenge, with a significant portion of the population still unbanked. Non-Banking Financial Companies (NBFCs) have emerged as key players in bridging this gap by providing financial services to those often overlooked by traditional banking institutions. This article delves into how NBFCs are fostering financial inclusion and empowering the unbanked.
Exploring Abhay Bhutada’s Views After Poonawalla Fincorp’s Collaboration With...beulahfernandes8
The financial landscape in India has witnessed a significant development with the recent collaboration between Poonawalla Fincorp and IndusInd Bank.
The launch of the co-branded credit card, the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card, marks a major milestone for both entities.
This strategic move aims to redefine and elevate the banking experience for customers.
US Economic Outlook - Being Decided - M Capital Group August 2021.pdfpchutichetpong
The U.S. economy is continuing its impressive recovery from the COVID-19 pandemic and not slowing down despite re-occurring bumps. The U.S. savings rate reached its highest ever recorded level at 34% in April 2020 and Americans seem ready to spend. The sectors that had been hurt the most by the pandemic specifically reduced consumer spending, like retail, leisure, hospitality, and travel, are now experiencing massive growth in revenue and job openings.
Could this growth lead to a “Roaring Twenties”? As quickly as the U.S. economy contracted, experiencing a 9.1% drop in economic output relative to the business cycle in Q2 2020, the largest in recorded history, it has rebounded beyond expectations. This surprising growth seems to be fueled by the U.S. government’s aggressive fiscal and monetary policies, and an increase in consumer spending as mobility restrictions are lifted. Unemployment rates between June 2020 and June 2021 decreased by 5.2%, while the demand for labor is increasing, coupled with increasing wages to incentivize Americans to rejoin the labor force. Schools and businesses are expected to fully reopen soon. In parallel, vaccination rates across the country and the world continue to rise, with full vaccination rates of 50% and 14.8% respectively.
However, it is not completely smooth sailing from here. According to M Capital Group, the main risks that threaten the continued growth of the U.S. economy are inflation, unsettled trade relations, and another wave of Covid-19 mutations that could shut down the world again. Have we learned from the past year of COVID-19 and adapted our economy accordingly?
“In order for the U.S. economy to continue growing, whether there is another wave or not, the U.S. needs to focus on diversifying supply chains, supporting business investment, and maintaining consumer spending,” says Grace Feeley, a research analyst at M Capital Group.
While the economic indicators are positive, the risks are coming closer to manifesting and threatening such growth. The new variants spreading throughout the world, Delta, Lambda, and Gamma, are vaccine-resistant and muddy the predictions made about the economy and health of the country. These variants bring back the feeling of uncertainty that has wreaked havoc not only on the stock market but the mindset of people around the world. MCG provides unique insight on how to mitigate these risks to possibly ensure a bright economic future.
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
Poonawalla Fincorp and IndusInd Bank Introduce New Co-Branded Credit Cardnickysharmasucks
The unveiling of the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card marks a notable milestone in the Indian financial landscape, showcasing a successful partnership between two leading institutions, Poonawalla Fincorp and IndusInd Bank. This co-branded credit card not only offers users a plethora of benefits but also reflects a commitment to innovation and adaptation. With a focus on providing value-driven and customer-centric solutions, this launch represents more than just a new product—it signifies a step towards redefining the banking experience for millions. Promising convenience, rewards, and a touch of luxury in everyday financial transactions, this collaboration aims to cater to the evolving needs of customers and set new standards in the industry.
What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the telegram contact of my personal pi merchant to trade with.
Tele-gram.
@Pi_vendor_247
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the telegram id of my personal pi merchant who i trade pi with.
Tele gram: @Pi_vendor_247
#pi #sell #nigeria #pinetwork #picoins #sellpi #Nigerian #tradepi #pinetworkcoins #sellmypi
Even tho Pi network is not listed on any exchange yet.
Buying/Selling or investing in pi network coins is highly possible through the help of vendors. You can buy from vendors[ buy directly from the pi network miners and resell it]. I will leave the telegram contact of my personal vendor.
@Pi_vendor_247
how to sell pi coins in all Africa Countries.DOT TECH
Yes. You can sell your pi network for other cryptocurrencies like Bitcoin, usdt , Ethereum and other currencies And this is done easily with the help from a pi merchant.
What is a pi merchant ?
Since pi is not launched yet in any exchange. The only way you can sell right now is through merchants.
A verified Pi merchant is someone who buys pi network coins from miners and resell them to investors looking forward to hold massive quantities of pi coins before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
The European Unemployment Puzzle: implications from population agingGRAPE
We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
how can i use my minded pi coins I need some funds.DOT TECH
If you are interested in selling your pi coins, i have a verified pi merchant, who buys pi coins and resell them to exchanges looking forward to hold till mainnet launch.
Because the core team has announced that pi network will not be doing any pre-sale. The only way exchanges like huobi, bitmart and hotbit can get pi is by buying from miners.
Now a merchant stands in between these exchanges and the miners. As a link to make transactions smooth. Because right now in the enclosed mainnet you can't sell pi coins your self. You need the help of a merchant,
i will leave the telegram contact of my personal pi merchant below. 👇 I and my friends has traded more than 3000pi coins with him successfully.
@Pi_vendor_247
how to sell pi coins on Bitmart crypto exchangeDOT TECH
Yes. Pi network coins can be exchanged but not on bitmart exchange. Because pi network is still in the enclosed mainnet. The only way pioneers are able to trade pi coins is by reselling the pi coins to pi verified merchants.
A verified merchant is someone who buys pi network coins and resell it to exchanges looking forward to hold till mainnet launch.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
ITC Q1FY15 results in line with estimates; buy - HDFC Sec
1. RETAIL RESEARCH Page | 1
HDFC sec Scrip code Industry CMP (Rs.) Recommended Action Averaging price band (Rs.) Target (Rs.) Time Horizon
ITCLTDEQNR FMCG 346.4 Buy at CMP and add on dips 312‐326 377 1 quarter
In our Q4FY14 result update dated May 29, 2014, we had recommended existing investors to buy ITC at the then CMP of Rs. 343.1 and add it on dips to Rs. 312‐326 for a
price target of Rs. 377. Thereafter the stock touched a low of Rs. 312.4 on June 23, 2014 and subsequently made a high of Rs. 364.4 on July 30, 2014. Currently, it is
quoting at Rs. 346.4.
ITC’s Q1FY15 results were in line with our estimates. We present an update on the stock.
Q1FY15 Results Review
Y‐o‐Y:
Net sales increased by 24.9% Y‐o‐Y to Rs. 91.6 bn as against Rs. 73.4 bn in Q1FY14, driven by cigarettes & Agri business (which grew by 18.8% & 50.6% Y‐o‐Y
respectively). Cigarettes volumes declined by ~2‐3%. FMCG business witnessed moderation in growth, which stood at 10.9%. Paperboard & Packaging grew by 10.9%,
while Hotels disappointed, de‐growing by 0.5%.
The core operating profit grew by 17.5%, while the OPM fell by 220 bps Y‐o‐Y to 34.9%, impacted by higher material cost (up 38.6% Y‐o‐Y). However, relatively lower
growth in the employee cost & other expenses (up 19.2% & 12.2% Y‐o‐Y) restricted further margin contraction. Cigarettes business witnessed an improvement in
margins (up 142 bps Y‐o‐Y), while FMCG ‐ others business lowered its losses from Rs. 189.3 mn in Q1FY14 to Rs. 155.9 mn in Q1FY15. However, Paperboard &
Packaging and Agri business witnessed margin contraction of 30 bps & 296 bps Y‐o‐Y respectively, while Hotels business reported loss of Rs. 121 mn compared to
profit of Rs. 89.4 mn in Q1FY14.
PAT grew by 15.6% Y‐o‐Y, while PAT margins declined by 192 bps Y‐o‐Y to 23.9%, impacted by higher tax rates (up 152 bps Y‐o‐Y). EPS for the quarter stood at Rs. 2.7
(on equity of Rs. 7955 mn) vs Rs. 2.4 in Q1FY14 (on equity of Rs. 7901.8 mn).
Q‐o‐Q:
Sequentially, the net sales grew marginally by 0.2%, led by Cigarettes, Paperboard & Packaging and Agri business (up 3%, 2.2% & 64.5 respectively). FMCG business de‐
grew by 16.4%, while Hotels witnessed a decline of 22.4%. Q‐o‐Q respectively.
Operating profit rose 2.7% Q‐o‐Q, while OPM improved by 84 bps Q‐o‐Q, aided by decline in the other expenses (down 15.4% Q‐o‐Q). However, PAT de‐grew by 4%,
while PAT margins declined by 105 bps Q‐o‐Q, impacted by higher tax rates (up 373 bps Q‐o‐Q).
Segment‐wise, Cigarettes & Paperboard & Packaging witnessed margin expansion of 222 bps & 640 bps Q‐o‐Q respectively. However, Agri business witnessed margin
contraction of 112 bps Q‐o‐Q, while FMCG & Hotels business reported losses, compared to profits at PBIT level in Q4FY14.
RETAIL RESEARCH August 07, 2014ITC Ltd. – Q1FY15 Result Update
2. RETAIL RESEARCH Page | 2
Quarterly Financials:
(Rs. in Million)
Particulars Q1FY15 Q1FY14 VAR [%] Q4FY14 VAR [%] Remarks
Net Sales 91644.2 73385.2 24.9 91451.4 0.2
Y‐o‐Y growth was driven by cigarettes & Agri business (which grew by 18.8% & 50.6% Y‐o‐Y
respectively). Cigarettes volumes declined by ~2‐3%. FMCG business witnessed moderation in
growth, which stood at 10.9%. Paperboard & Packaging grew by 10.9%, while Hotels disappointed,
de‐growing by 0.5%.
Total Expenditure 59707.0 46193.9 29.3 60351.3 ‐1.1
Raw Material Consumed 26606.2 21882.7 21.6 27078.9 ‐1.7
Material Cost / Net Sales (including stock adjustment & finished goods purchased) increased by
431 bps Y‐o‐Y & 109 bps Q‐o‐Q.to 43.4% in Q4FY14.
Stock Adjustment ‐6038.6 ‐1846.8 227.0 1503.5 ‐501.6
Finished Goods Purchased 19208 8653.7 122.0 10113.8 89.9
Employee Expenses 5086.6 4268.7 19.2 4108.1 23.8
Other Expenses 14844.8 13235.6 12.2 17547 ‐15.4
Operating Profit 31937.2 27191.3 17.5 31100.1 2.7
Other Income 3184.2 2753.6 15.6 3600.9 ‐11.6
PBIDT 35121.4 29944.9 17.3 34701.0 1.2
Interest 151.5 169.5 ‐10.6 95.3 59.0
PBDT 34969.9 29775.4 17.4 34605.7 1.1
Depreciation 2313.2 2153 7.4 2378.3 ‐2.7
PBT 32656.7 27622.4 18.2 32227.4 1.3
Tax (incl. FBT & DT) 10792.8 8709.1 23.9 9447.3 14.2 The effective tax rate on PBT increased by 152 bps Y‐o‐Y & 373 bps Q‐o‐Q to 33.1%
PAT 21863.9 18913.3 15.6 22780.1 ‐4.0 Y‐o‐Y PAT growth was impacted by lower operating profit growth and higher effective tax rate.
EPS 2.7 2.4 14.8 2.9 ‐4.0
Equity 7955 7901.8 0.7 7953.2 0.0
Face Value 1 1 0.0 1 0.0
OPM (%) 34.9 37.1 ‐5.9 34.0 2.5 Y‐o‐Y margin contraction was on account of higher material cost.
PATM (%) 23.9 25.8 ‐7.4 24.9 ‐4.2
(Source: Company, HDFC Sec)
Segmental Results:
(Rs. in Million)
Particulars Q1FY15 Q1FY14 VAR [%] Q4FY14 VAR [%] Remarks
Revenue (Net)
FMCG Cigarettes 42010.6 35373.9 18.8 40787.8 3.0
The volumes declined by ~2‐3% due to steep price hikes undertaken by the company. It
was the fifth straight quarter of volume decline. However, value growth at 18.8% was
the highest since Q3FY10, largely due to steep price hikes and improved mix.
FMCG Others 19346.1 17446.6 10.9 23145.1 ‐16.4
FMCG business witnessed moderation in growth, impacted by slowdown in
consumption expenditure and high base of last year. Volume growth stood in high
single digits in biscuits & noodles categories (compared to double digit growth in earlier
3. RETAIL RESEARCH Page | 3
quarters). While Packaged Foods & deodorants grew by, slowdown was witnessed in
apparels, matches & soaps.
Paper Boards, Paper &
Packaging
12884.8 11631.4 10.8 12612 2.2
Growth was driven by improved capacity utilisation of recent investments.
Agri Business 32960.6 21889.8 50.6 20042.4 64.5
Robust Y‐o‐Y & Q‐o‐Q growth in Agri Business revenues was driven by trading
opportunities in wheat, soya and coffee.
Hotels 2486.9 2498.6 ‐0.5 3205.1 ‐22.4
Growth was impacted by adverse demand‐supply dynamics (weak demand and high
inventory levels)
Total 109689.0 88840.3 23.5 99792.4 9.9
Less: Inter Segment Revenue 18044.8 15455.1 16.8 8341 116.3
Net sales/inc. from Operations 91644.2 73385.2 24.9 91451.4 0.2
Segment Results
FMCG Cigarettes 27217.5 22417.2 21.4 25519.4 6.7
FMCG Others ‐155.9 ‐189.3 ‐17.6 430.9 ‐136.2
After two consecutive quarters of profits (in Q3 & Q4 of FY14), the segment reported
losses at PBIT level (possibly due to increased investments in brands) However, on Y‐o‐Y
basis, the losses were lower during the quarter.
Paper Boards, Paper &
Packaging
2749 2516.0 9.3 1884.1 45.9
Agri Business 2024.5 1993.1 1.6 1454.8 39.2
Hotels ‐120.9 89.4 ‐235.2 598.5 ‐120.2
The segment reported loss during the quarter due to change in the depreciation policy
(additional depreciation charge of Rs. 143 mn due to revision in useful life of fixed
assets in accordance with Companies Act, 2013). Adjusted for this, the business
reported marginal profit of Rs. 22 mn in Q1FY15
Total 31714.2 26826.4 18.2 29887.7 6.1
Interest ‐151.5 ‐169.5 ‐10.6 ‐95.3 59.0
Other un‐allocable expenditure
net off un‐allocable income
1094.0 965.5 13.3 2435.0 ‐55.1
Total Profit Before Tax 32656.7 27622.4 18.2 32227.4 1.3
Net EBITM (%)
FMCG – cigarettes 64.8 63.4 142 bps 62.6 222 bps Margin expansion on Y‐o‐Y & Q‐o‐Q basis was driven by steep price hikes.
FMCG ‐ others ‐0.8 ‐1.1 ‐ 1.9 ‐
Paperboards, paper & packaging 21.3 21.6 ‐30 bps 14.9 640 bps
The business margins declined on Y‐o‐Y basis due to higher input cost. However,
sequentially, the margins improved, led by improved mix, higher utilizations, and
change in method of charging depreciation, which had a positive impact.
Agri‐business 6.1 9.1 ‐296 bps 7.3 ‐112 bps Segment margins declined due to deterioration in mix and lower leaf tobacco sales).
Hotels ‐4.9 3.6 ‐ 18.7 ‐
Total 28.9 30.2 ‐128 bps 29.9 ‐104 bps
Capital Employed
4. RETAIL RESEARCH Page | 4
FMCG Cigarettes 50874.6 46563.3 9.3 57054.8 ‐10.8
FMCG Others 39417.4 30093.5 31.0 33835.3 16.5
Paper Boards, Paper &
Packaging
54540.9 49866.1 9.4 53190.8 2.5
Agri Business 22990.3 17389.5 32.2 20524.4 12.0
Hotels 36484.6 35054.6 4.1 36253.9 0.6
Total Capital Employed 204307.8 178967.0 14.2 200859.2 1.7
(Source: Company, HDFC Sec)
Other highlights / developments:
• The Scheme of Arrangement between Wimco Limited (‘Wimco’) and the Company became effective on 27th June, 2014 on filing of the Order of the Hon’ble High
Court with the respective Registrar of Companies. The Scheme, with effect from 1st April 2013, provided for the demerger of the Non Engineering Business of Wimco
into the Company. The results for the quarter ended 30th June, 2014 reflect the effect of the Scheme. Pavan Poplar Limited and Prag Agro Farm Limited have become
direct subsidiaries of the Company with effect from 27th June, 2014, consequent upon the Scheme becoming effective.
• ITC is planning to enter new business segments such as fruit juice, tea, coffee and chocolates, among others. For years, there has been speculation about ITC launching
dairy products and beverages, but this is the first time the company’s chairman announced it to shareholders.
• Unlike earlier quarters, ITC did not provide with gross sales figures in this quarter.
Conclusion & Recommendation:
ITC’s Q1FY15 results (Y‐o‐Y) were in line with our estimates. Cigarettes volumes declined for fifth straight quarter by ~2‐3%. However, this was on expected lines. Steep
price hikes initiated supported the overall growth, which remained in high double digits. Infact it was the highest value growth reported since Q3FY10. Growth in the
FMCG business continued to moderate (more of less on expected lines), impacted by slowdown in consumption expenditure. Sharp rise in Agri business revenue growth
(driven by trading opportunities in wheat, soya and coffee) was a positive surprise. Growth in Paperboard & Packaging was below our expectations, but still decent, while
Hotels continued to disappoint with a revenue de‐growth. We were disappointed with the overall margin contraction on Y‐o‐Y basis (impacted by input cost inflation).
Leaving cigarettes (which witnessed margin improvement led by price hikes) and FMCG business (which managed to lower its losses on Y‐o‐Y basis), all the other
segments witnessed margin contraction.
In the recently held FY15 Union Budget, the government hiked the excise duty on cigarettes by 11‐72% (72% on cigarettes of length not exceeding 65 mm and to 11‐21%
hike for cigarettes of other lengths). For ITC, weightage average hike was ~21‐22%. The company has increased prices in some of its brands and packs by 4‐23% and is
expected to take a further round of price increases in H2FY15 to neutralize the impact of excise hikes. While the below 64 mm cigarettes is gaining traction, its growth
could be impacted post sharp excise hikes in this category. We would monitor the pricing action by ITC in this category in the coming quarters. Post the third straight year
of steep hike in excise duty on cigarettes, we expect the cigarettes volume growth to remain subdued and decline in FY15 by around 4‐5%. However, price hikes would
support the overall value growth & margins.
Non‐Cigarettes FMCG business has been clearly witnessing moderation in revenue growth over the last few quarters, in line with the industry slowdown. We expect this
to persist in near term. However, we expect recovery from Q2/Q3 of FY15, as we expect the economic growth & spending power to improve. The segment has managed
5. RETAIL RESEARCH Page | 5
to breakeven at EBIT level during FY14. Though in Q1, it reported losses, it could end the year FY15 in positive at PBIT level (improvement expected at gradual pace).
Packaged foods, personal care and stationery businesses would be the key growth drivers of the business.
We feel the hotel business revenue growth could continue to remain subdued until there is a meaningful improvement in domestic travel & tourism industry, which could
be possible only if the global environment improves. As regards the Agri business, the growth in revenue & profits would improve (Growth in Q1FY15 was substantial high
due to change in mix and is expected to normalize, but would still continue to be healthy) due to scaling up of operations at the recently commissioned state‐of‐the art
green leaf tobacco threshing plant in Mysore, resulting in better quality and supply chain efficiencies. The Paper Board & Packaging business has started to witness some
improvement in the product mix and volumes on the back of commissioning of 1 lac tpa new facility at Bhadrachalam (total capacity to increase to 5.5 lacs tpa). We
expect better growth in revenues from this segment in the coming quarters. However, the business margins continue to be under pressure in near to medium term on
the back of higher input cost. ITC has resorted to captive sourcing of wood through plantations. However, the same would be effective by FY16, post which we expect
some stability / improvement in margins.
We feel ITC is on track to meet our FY15 & FY16 estimates. Hence we are keeping them unchanged. At CMP, the stock trades at 23.9xFY16. While the downside in the
stock price is limited from current levels, sharp rerating is unlikely to happen until we see a meaningful recovery in the cigarettes volume growth and FMCG & Hotels
business. However, in the current FMCG industry scenario, ITC continues to remain one of our most preferred picks amongst the FMCG companies, given its diversified
business portfolio.
We are maintaining our price target at Rs. 377 (valuing the stock at 26xFY16E EPS). We feel investors could buy this stock at current levels and add it on dips to Rs. 312‐
326 (21.5‐22.5xFY16E EPS) band for our price target over the next quarter.
Financial Estimations:
(Rs. in Million)
Particulars FY11 FY12 FY13 FY14 FY15E FY16E
Net Sales 211675.8 247984.3 296055.8 328825.6 378004.1 438484.8
Operating Profit 71213.1 84995.9 103324.2 119408.9 137593.5 160485.4
Net Profit 49876.1 61623.7 74183.9 86522.61 99037.1 115321.5
Equity 7738.1 7818.4 7901.8 7953.2 7955.0 7955.0
EPS (Rs.) 6.4 7.9 9.4 10.9 12.4 14.5
OPM (%) 33.6 34.3 34.9 36.3 36.4 36.6
PATM (%) 23.6 24.8 25.1 26.3 26.2 26.3
PE 53.7 43.9 36.9 31.8 27.8 23.9
(Source: Company, HDFC Sec Estimates)
6. RETAIL RESEARCH Page | 6
Analyst: Mehernosh K. Panthaki – IT, FMCG & Midcaps; Email ID: mehernosh.panthaki@hdfcsec.com
RETAIL RESEARCH Tel: (022) 3075 3400 Fax: (022) 2496 5066 Corporate Office
HDFC securities Limited, I Think Techno Campus, Building - B, "Alpha", Office Floor 8, Near Kanjurmarg Station, Opp. Crompton Greaves, Kanjurmarg (East), Mumbai 400 042 Phone: (022) 3075 3400 Fax: (022)
2496 5066 Website: www.hdfcsec.com Email: hdfcsecretailresearch@hdfcsec.com
Disclaimer: This document has been prepared by HDFC Securities Limited and is meant for sole use by the recipient and not for circulation. This document is not to be reported or copied or made available to
others. It should not be considered to be taken as an offer to sell or a solicitation to buy any security. The information contained herein is from sources believed reliable. We do not represent that it is accurate or
complete and it should not be relied upon as such. We may have from time to time positions or options on, and buy and sell securities referred to herein. We may from time to time solicit from, or perform investment
banking, or other services for, any company mentioned in this document. This report is intended for non-Institutional Clients