| 12-month trailing P/E@ 165 | 31 |
| |
| The operating profit was up 8.4 per cent to Rs 345.7 crore but the EBITDA margin at 12.2 per cent was flat, owing to larger spends on advertising and higher raw material prices.
|
| |
| The company managed to maintain its leadership position and gained market-share in key categories such as shampoos, detergents and beverages. Lower interest expenses helped the net profit (before exceptionals) grow by 17 per cent to Rs 300.4 crore.
|
| |
The double digit sales growth in the HPC segment, which grew by 12 per cent to Rs 2,018.92 crore, was driven by a 17 per cent growth in personal products, a 9.3 per cent growth in soaps and detergents and a 20 per cent growth in segments such as shampoos. The foods business as a whole (including ice cream) grew 10.8 per cent to Rs 427.82 crore. However, sales of processed foods fell though losses were down from Rs 27.39 crore to Rs 4.52 crore.
The EBITDA margin dropped by about 20 basis points, thanks to a 60 basis points rise in material costs and higher spends on advertising at 10.1 per cent of net sales. Sequentially though, the EBITDA margins were up 247 basis points.
At the PBIT level, margins for soaps and detergents and personal products fell 125 basis points while for personal products they were down 439 basis points and for beverages 155 basis points, dragging down overall PBIT margins by 67 basis points.
|
| |
| At the current price of Rs 165, the stock trades at 28 times the expected earnings of Rs 6 for CY05 and 23 times CY06 earnings estimate of Rs 7.
|
| |
| While the stock is not cheap given that margins are still under pressure and that earnings growth should average 16-17 per cent in the next two years, analysts believe that the sales growth will sustain and if some pricing power returns, the company should be able to better its margins.
|
| |
ITC
Hotel and agri businesses lift topline
|
| |
ITC turned in good numbers for the quarter ended June 2005 with a 27.7 per cent increase in the topline to Rs 2,266.9 crore. The company reported an operating profit growth of 18.5 per cent to Rs 826 crore.
| ITC | | (Rs crore) | Q1FY06 | Q1FY05 | % change | | Net sales | 2266.9 | 1775 | 27.7 | | Other income | 84.5 | 57.8 | 46 | | Operating profit | 826.8 | 697.6 | 18.5 | | OPM (%) | 36.5 | 39.3 | -280 bps | | Net profit | 558.3 | 462 | 20.8 | | NPM (%) | 24.6 | 26 | -140 bps | | EPS (Rs) | 22.4 | 18.6 |
- | | 12-month trailing P/E@ 1,740 |
19.1 |
|
| |
| However, the EBITDA margin dropped by about 270 basis points to 36.5 per cent. The net profit growth was strong at 20.8 per cent at Rs 558.3 crore.
|
| |
The strong topline growth has been driven by the hotels and agri-businesses and to some extent by the paperboards division. The contribution of non-tobacco businesses to the topline was 26.6 per cent compared with 22 per cent in FY04.
The 12 per cent revenue growth in cigarettes, one would estimate, is the result of a more or less equal contribution from volumes and prices. Cigarettes contributed about 73.3 per cent to the topline compared with 78.4 per cent in Q1FY05. The hotels division grew a stunning 135 per cent, driven by higher ARRs and an upturn in the hotel industry
|
