ITC’s Q3 In-Line, But Outlook Remains Hazy: Motilal Oswal

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Motilal Oswal Report

ITC Ltd.’s Q3 FY21 results were broadly in-line, with cigarette volumes declining approximately 7% YoY.

Unlike other discretionary categories, no sharp sequential improvement is seen in cigarettes. There was no respite on cigarette Ebit either, with 8.1% YoY decline posted for Q3 - implying that cigarette Ebit growth has been below 10% for 24 of the past 26 quarters now.

Growth in the fast moving consumer goods-others business has also tapered to the single digits on a reported basis as in-home consumption is no longer growing at the same pace.

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