Crude Oil Breaking Below 1.5-Year Support The latest recessionary signal we are seeing includes WTI and Brent crude oil prices violating 1.5-year supports, which only adds to our prior concerns about a weakening labor market and possible recession in the U.S., considering the Sahm rule and Schannep Recession Indicator (SRI) have both triggered. We also discussed last week (August 29 Int'l Compass) how we were expecting the S&P 500, Japan's TOPIX, and Europe's EURO STOXX 50 to "roll over near cu...
No Traction Above $93 on MSCI ACWI (ACWI-US) or 4400-4415 on EURO STOXX 50 There continues to be little traction above $93 on the MSCI ACWI (ACWI-US), which remains the top-end of our anticipated 2023 trading range. Important downside targets are $86, $84, and $75-77 on ACWI-US. Additionally, the EURO STOXX 50 remains below 2-year resistance at 4400-4415. We remain overweight Europe, Japan, and India, and we prefer to only add exposure on a pullback -- especially in Japan where indexes are bull...
ITC: Cigarette volumes deliver positive surprise, boost margins (ITC IN, Mkt Cap USD52.4b, CMP INR350, TP INR400, 14% Upside, Buy) ITC’s sales growth momentum was better than expected across businesses in 2QFY23. Estimated Cigarette volume growth of 21% YoY was a positive surprise and resulted in a three-year volume CAGR of 5.1%. The higher-than- expected contribution from the high-margin Cigarettes business resulted in a 250bp beat on our EBITDA margin estimates, which came in at 36.4%. As...
. ITC: Broad-based sales growth drives EBITDA beat (ITC IN, Mkt Cap USD48.1b, CMP INR308, TP INR355, 15% Upside, Buy) Sales growth momentum was better than expected across businesses in 1QFY23. Barring the Agri business, where the ban on wheat exports may result in relatively muted growth in subsequent quarters, momentum in other businesses is expected to remain robust. As highlighted in our note as well as our , strong earnings momentum (16% EPS CAGR over FY22-24 v/s ~5% in the preced...
ITC (IN), a company active in the Tobacco industry, loses a star(s) at the fundamental level and sees its general evaluation downgraded. The independent financial analyst theScreener just removed a fundamental star(s) for a 2 over 4-star rating. As such, market behaviour remains unchanged and is evaluated as moderately risky. theScreener believes that the loss of a star(s) merits downgrade to the general evaluation of the title, which passes to Neutral. As of the analysis date November 26, 2021,...
ITC: Muted Cigarette volumes; Other FMCG margin pressures weigh on ITC (ITC IN, Mkt Cap USD38.3b, CMP INR232, TP INR240, 4% Upside, Neutral) Tapering in-home consumption and sharp commodity cost inflation could affect strong EBIT growth in the Other FMCG segment, preventing the contribution of Cigarettes in overall EBIT to decline much (likely to reduce to ~80% in FY23E which is still within its ten-year range of 80-86%). Cigarette volumes for ITC and even other players globally have bee...
ITC: In line result; no Cigarette EBIT revival in sight (ITC IN, Mkt Cap USD39.1b, CMP INR238, TP INR240, 1% Upside, Neutral) ITC's 2QFY22 result was broadly in line with our estimates. Weakness in the Cigarette and Agri sales were offset by a good performance in Paperboards and Hotels. While volume recovery over a weak base continues, neither Cigarette volumes nor EBIT is back to growth levels over 2QFY20 (two years ago). Growth in FMCG - Others was only 3% (albeit on a healthy base). ...
Full Article at IIR has reaffirmed its Recommended rating for PIA after undertaking a review post the appointment of a new Portfolio Manager, Harding Loevner. The full report can be found on the IIR website. On 26 July 2021, Pengana International Equities Limited (PIA) announced a fully franked dividend of 1.35 cents per share for the June quarter. This represents an 8% increase on the March quarter dividend and takes the total dividends declared for FY21 of 5.1 cents per share, fully franked....
Four Directors at ITC Ltd sold 105,000 shares at between 208.020INR and 212.280INR. The significance rating of the trade was 52/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last...
Event The Union Budget 2020 has hiked National Calamity Contingent Duty (NCCD) on tobacco products, including cigarettes (across sizes). The new NCCD is applicable from of 02 Feb 2020. Key details NCCD on filter cigarettes of size upto 70mm has been increased to Rs440 per thousand sticks from Rs90 currently. For length between 70-75mm, NCCD has been increased to Rs545 per thousand sticks from Rs145. For longer cigarettes, NCCD has been increased to Rs735 per thousand sticks from Rs235 curre...
Q2FY20 result highlights ITC’s net revenues grew by 5.3% yoy to Rs118.7bn (est: Rs120.6bn). EBITDA grew 8.5% yoy at Rs45.6bn (est: Rs46.6bn). PAT grew by strong 36.2% yoy to Rs40.3bn (est: Rs40.5bn). Cigarette revenues grew by 6% yoy (est: 6%). We estimate Cigarette volumes grew by ~3% yoy (est: 3%, consensus: 2-4%). Cigarette EBIT grew by 7.4% yoy (est: +7% yoy) with margin expansion of 100bps yoy to 72.2% aided by improved price/mix (and higher contribution from in-house capsules). FMCG s...
Q1FY20 result highlights ITC’s net revenues increased by 6% yoy to Rs115bn (est: Rs119bn). EBITDA grew 8.7% yoy at Rs45.6bn (est: Rs45.6bn). PAT increased by 12.6% yoy to Rs31.7bn (Rs31.3bn). Cigarette revenues grew by 6% yoy (est: +6.5%). We estimate Cigarette volumes increased by ~3% yoy (est: 3%, consensus: 3-6%). Cigarette EBIT grew by 8.2% yoy (est: +8% yoy) with margin expansion of 140bps yoy aided by improved price/mix (higher contribution from in-house capsule). FMCG sales increased...
ITC: In-line, but Cig. volumes disappoint (ITC IN, Mkt Cap USD46.7b, CMP INR265, TP INR290, 10% Upside, Neutral) Net revenues grew 5.8% YoY to INR115b (our est. 9.4% growth to INR117.1b). EBITDA grew 8.7% YoY to INR45.7b (our est. INR45.9b) while Adj. PAT increased 12.6% YoY to INR31.7b (our est. INR30.9b). Overall Gross/EBITDA margins expanded 180bp/110bp YoY to 64%/39.7%. Cigarette volumes are likely to have grown ~3% (our est. 6%), leading to cigarette net sales growth of 6% YoY. Ciga...
Event The Union Budget has brought tobaccos products, including cigarettes, under the central excise duty net and has proposed nominal central excise duty across cigarette segments. Key details Tobacco products attract National Calamity and Contingent duty (NCCD) and in certain cases this levy has been contested on the ground that there is no basic excise duty applicable on these items. This budget is addressing this anomaly and has introduced a nominal excise duty component on cigarettes/t...
ITC: Aggressive investment continues in FMCG-Others segment; Near-term outlook for cigarettes uncertain; Valuations fair (ITC IN, Mkt Cap USD48.9b, CMP INR276, TP INR310, 12% Upside, Neutral) We pored over ITC’s FY19 annual report; key insights highlighted below: Cigarette sale mix continues to reduce EBIT contribution remains high ITC’s cigarette business’ contribution to revenues has been steadily declining over the years (now stands at ~41%, excluding eliminations), but it account...
ITC: Delivers on expectations, but smoky outlook keeps us neutral (ITC IN, Mkt Cap USD50.4b, CMP INR290, TP INR305, 5% Upside, Neutral) ITC delivered growth of 13.3% YoY in net revenue (INR119.9b v/s our estimate of INR120.3b), 10.3% YoY in EBITDA (INR45.7b v/s our estimate of INR46.9b) and 18.7% YoY in adj. PAT (INR34.8b v/s our estimate of INR32b) in 4QFY19. EBITDA margin shrank 100bp YoY to 38.1% (our estimate: 39%). Cig volumes are likely to have grown at ~8% YoY (our estimate: 7% Yo...
ITC: Cig volumes strong off a low base; rate hike decisions hold key (ITC IN, Mkt Cap USD47.7b, CMP INR278, TP INR300, 8% Upside, Neutral) ITC's net revenue grew 14.9% YoY to INR112.3b (our estimate: INR106.5b), EBITDA increased 11.2% YoY to INR43.3b (our estimate: INR42.4b) and adj. PAT grew 14.4% YoY to INR32b (our estimate: INR30b). Cigarette volumes are likely to have grown at ~7% YoY. Cigarette net sales grew 9.6% YoY. EBIT margin contracted by 50bp YoY, led by higher input cost an...
ITC: Sales in-line; Cigarette margins affected by Kerala floods, packaging costs (ITC IN, Mkt Cap USD47.6b, CMP INR281, TP INR295, 5% Upside, Neutral) ITC’s net revenue grew 7.3% YoY to INR110.7b (our estimate: INR111.4b), EBITDA rose 11.8% YoY to INR42.1b (our estimate: INR43.4b), while adj. PAT increased 11.9% YoY to INR29.5b (our estimate: INR29.9b). Cigarette volumes are likely to have grown by ~6%. Cigarette net sales grew 10.4% YoY. Cigarette EBIT was marginally impacted by stock ...
Q1FY19 result highlights ITC’s reported revenues stood at Rs107.2bn (est: Rs107.7bn). EBITDA grew 12% yoy at Rs42bn(est: Rs41bn). PAT increased by 10% yoy to Rs28bn (Rs28bn). Comparable cigarette revenues grew by ~10% yoy. Cigarette volumes increased by ~1.5% yoy while EBIT grew by 8.7% yoy (est: 8.1% yoy). Comparable revenues for FMCG increased by 14.3% yoy. Segment EBITDA increased by 86% yoy to Rs1.27bn with a margin expansion of 190bps to 4.5%. Hotels & Agri revenues increased by 12% a...
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