Street not convinced with ITC post decent Q4, cigarette biz faces headwinds

FMCG, cigarette biz provide cheer, but all eyes on sustenance

ITC put up a decent showing in the March quarter (Q4), with earnings beating estimates, but fell short of exciting the Street.

The firm reported good performance in its non-cigarette FMCG business (Aashirvaad, Sunfeast, Bingo!), and announced a higher dividend payout (80 per cent against 68-69 per cent according to the new distribution policy). However, these failed to enthuse investors.

Consequently, the stock gave up gains at close on Tuesday, following the 1 per cent rise on Monday. This was despite the attractive valuation of 16x its FY21 earnings — half of the 35x for peers. Uncertainty over its cigarette business remains