On a year-on-year (YoY) basis, the company could post a net profit growth of 13-16.6 per cent to around Rs 4,814 crore, as per an average of five brokerage estimates. Though sequentially, profit is expected to decline 3-5 per cent.
The major highlight will be the strong YoY ebitda (earnings before interest, tax, depreciation and ammortisation) margin gains of as much as 500 points to 38.7 per cent led by a fall in input costs, operating efficiency and a favourable product mix.
The stock is up 28 per cent so far this year, as compared to 1 per cent and 12 per cent rise in the Nifty50 and Nifty FMCG indices, respectively.
Here’s what brokerages expect:
Sharekhan: Cigarette business revenues are expected to rise 13 per cent YoY led by 10-11 per cent volume growth, while the FMCG business is expected to grow 19 per cent. Sees a 70 per cent growth in hotel segment on sustained strong demand. The paper business is expected to grow 15 per cent, while agribusiness growth will likely decline 30 per cent. Gross margin and operating margin are seen expanding 335 bps and 320 bps YoY. Net profit is seen rising 14 per cent YoY in line with an equal growth in operating profit.
HDFC Research: The brokerage modelled a 16.8 per cent YoY growth in cigarette revenue, with volume growth of 16 per cent. The non-cigarette business is expected to grow 5 per cent YoY, which has been impacted by the agri-business. Sees 17 per cent YoY growth in the FMCG segment. Expects cigarette EBIT to grow 16 per cent YoY and sees FMCG EBIT margin at 7.3 per cent versus 5.7 per cent a year ago.
Systematix Institutional Equities: Sees Cigarette volume growth of 13 per cent, high growth in hotels and steady growth in the paper business. Sees limited possibility of valuation de-rating or earnings cuts in the stock.