ITC has performed well in the third quarter. The sales of its core business i.e. cigarette business has crossed the pre-covid level in this period. For the quarter ended December 31, the company’s earnings from the cigarette segment stood at Rs 6,244 crore. It has seen an increase of 13.6 percent on a yearly basis. Let us inform that in the third quarter of the last financial year, the income of the company’s cigarette business stood at Rs 5,498 crore.
On a quarterly basis also, the company’s cigarette business has seen a growth of 11 per cent. In the second quarter of the same financial year, the company’s income from cigarette business stood at Rs 5,642 crore. The cigarette segment contributed 35 per cent to the company’s total revenue in the third quarter.
Brokerage firm Jefferies has said in a note that ITC has performed strongly in the third quarter. 4 out of 5 segments have performed better than expected. The 12 per cent growth in the volume of the cigarette segment is a surprise in itself. With annual growth of 2 per cent in the last two years, this is the first strong growth seen after the first 7 quarters.
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This should also reduce the concerns related to consumer behavior. In the third quarter, the EBIT of the company’s cigarette business has seen a growth of 14 percent and stood at Rs 3,950 crore, which is the highest level in any quarter.
Jefferies has said in its report that after about two years, the volume of the company’s cigarette business has reached the pre-Covid level. The company’s management has also further indicated that there has been a strong recovery in the company’s business across all markets due to improvement in mobility and pick up in other services.
Another brokerage house, Edelweiss, has revised its buy target to Rs 285 while increasing the rating of ITC.
Let us tell you that on February 3, the company presented its third quarter results. The company’s standalone profit after tax (PAT) grew 12.7% to Rs 4156.20 crore between the three months of October to December 2021. Earlier in the December quarter of last year, the company’s PAT was Rs 3687.88 crore.
The income of ITC engaged in business ranging from cigarettes to hotels stood at Rs 18,365 crore. It was Rs 14,485 crore in the same quarter last year. Along with releasing the December quarter results, the company’s board has also announced interim dividend. For the current fiscal, the company has announced a dividend distribution of Rs 5.25 per share.
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