ITC breaks out of Covid range, nears 3-year high

At a time when most peers witness margin headwinds, every single segment of ITC has seen stable to expanding margins in Q4, with smart gains in cigarette & FMCG 

Cig growth at 9% with double-digit Ebit broadly in line. >20% Ebitda growth is key positive Dividend pay-out improves to co.95% this drives up RoE to a 7-Y high of 25%. 

ITC’s Q4 Ebitda Rs 52.2 bn, Growth was led by the cigarette business, which saw a 12% Ebit growth FMCG surprised positively, both on revenue and margin fronts. 

Paperboards also performed better than expected, although this was offset by a miss in hotels & agri business. EPS growth was a tad lower (+12% y-o-y) due to lower other financial income 

FMCG outperforms: FMCG revenue grew 12% y-o-y (vs. 9% in Q3), better than estimates. Growth was led by discretionary/ out-of-home categories as mobility improves 

While FMCG peers combat growth slowdown and RM pressures, ITC is seeing a recovery in earnings, with good momentum across verticals and high margin visibility. 

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