Recovering ITC cigarette volumes a positive, improvement to boost earnings

Even as ITC posted a 9.9 per cent year-on-year rise in its March-2018 quarter (Q4) net profit, living up to analysts' expectations, and its cigarettes volumes continued to decline (down an estimated 2-3 per cent in Q4) owing to high prices triggered by massive taxes, its share price closed 1.5 per cent higher in a weak market.

Cigarettes and FMCG (fast moving consumer goods) together account for 70 per cent of ITC's sales and 90 per cent of profits, and the improving prospects of these two businesses are keeping the Street positive on the stock.

Cigarettes volumes seem to be on recovery