ITCPart of the S&P BSE Sensex Index, has re-entered the top-10 club of Indian stock exchanges. With a market cap of Rs 3,63,907 crore at Monday’s closing price, ITC beat Airtel to be at the 10th position. Looking at the market capitalization of all listed companies on BSE ‘Mem Stock’ ITC It is now the 10th largest company in India, leaving behind giants and Dalal Street favorites like Bharti Airtel, Bajaj Finance, Adani Green Energy, Kotak Mahindra Bank, and others.
So far in the calendar year 2022, ITC has outperformed the market with a gain of over 34 per cent against the 8.5 per cent fall in the Sensex. ITC also touched a 52-week high at Rs 296.95 and is now nearing Rs 300.
Apart from being a near-monopoly in its traditional business of cigarettes, ITC is also India’s leading FMCG marketer, a clear market leader in the Indian paperboard and packaging industry, recognized globally in farmer empowerment through its extensive agribusiness and a pre-eminent hotelier India With a chain of luxury hotels.
The company’s cigarette business staged a broad recovery, with volumes surpassing pre-pandemic levels. A stagnant tax environment for cigarettes in recent years has allowed ITC to check price increases to avoid a demand disruption. The non-cigarette FMCG business performed well through focused cost management interventions across the value chain, premiumization and prudent pricing functions.
ICICI Securities said ITC’s 23.3 per cent (y-o-y) revenue growth was driven by 21.8 per cent growth in cigarette business, 28 per cent year-on-year growth in paperboard business and 17.5 per cent year-on-year growth in FMCG business. expected to be strong. Its Q1 results preview.
“The strong growth in the cigarette business is primarily due to the improvement in cigarette volumes to pre-Covid levels. Growth in the paperboard business is contributed by higher volumes from the lower base quarter and strong price growth given the rapid rise in paper prices globally due to energy shortages in Europe. Growth in the FMCG business is likely to be aided by a steady recovery in business and price increases in the food items, personal care businesses. The brokerage said agribusiness sales are expected to remain flat, as wheat exports were banned during the quarter and hotels business is expected to have pre-Covid sales.
According to Motilal Oswal, recovery in demand for cigarettes, some profitable FMCG-recoveries in other categories, and lesser gaps in the hotel business along with lower input cost pressures and attractive valuations as compared to peers make ITC a top spot. financial Services.
We expect gross margin expansion of 190 bps annually on an 11 percent volume increase in cigarettes and a reduction in gaps from improved cigarette mix and hotels. Key watchdogs include cigarette volumes and hotel revenues following the opening of workplaces and increased travel. The outlook for agriculture, paper and packaging and hotel businesses will also be monitored, the brokerage firm said in its results preview.
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