The ITC counter seemed lacking verve in mid-morning trades on Friday as the scrip scraped higher by a mere 0.20% to Rs 682.50 even though the company is expected to announce satisfying results later on Friday.
The scrip of the cigarette major registered volumes of 20,968 shares on BSE by 10:50 IST, seemingly low on the eve of results. In the 10 sessions between 2 January and 16 January 2003, ITC moved up 3.83% to Rs 681.15 from Rs 656.
At 10:50 IST, the BSE Sensex stood at 3,377.76, up 4.24 points.
For Q3, a capitalmarket.com poll of five FMCG analysts has projected ITC's net profit to rise by 16-31% to Rs 301-339 crore (Rs 3.01-3.39 billion) on a 21-30% increase in net sales to Rs 1,466-1,555 crore (Rs 14.66-Rs15.55 billion).
The company should most probably turn out satisfactory results for the quarter ended 31 December 2002 going by the price hikes it has effected and the stable volume growth. The company has also been able to pass on the hike in taxes to the consumer.
The company's aggregate consumer products sales have improved during November 2002, setting aside fears of a weak monsoon-led slowdown. This is the second consecutive good month for the company as retail sales growth was at 4.5% up from 3.2% in October. Top line will also improve due to the merger of ITC Bhadrachalam as well as on a robust 5% volume growth in cigarettes.
Analysts feel ITC will also be able to generate revenues from its new businesses. The company has been on a diversification drive of late, mainly aimed at de-risking its business that is heavily hinged on cigarettes. ITC has forayed into businesses like atta (flour), biscuits and confectionery. Recently, ITC merged ITC Bhadrachalam Paperboards with itself.
There have been reports of late that the company is investing $750 million in ITC Hotels over a period of five years.
For Q2 ended 30 September 2002, ITC registered a 12% rise in net profit to Rs 380.50 crore (Rs 3.8 billion) on a 22% increase in sales to Rs 1,470.3 crore (Rs 14.7 billion). ITC's cigarette business continues to remain the most profitable area of its operations, accounting for 74% of its revenues.
Foreign institutional investors, local institutions and the public hold 32.5%, 47.11% and 14.5% equity stakes in ITC respectively.
BSE Code: 500875
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