ITC Ltd, one of India’s leading FMCG giants, is set to announce its Q3 FY25 results today, bringing investors’ focus to the company’s revenue growth, profit margins, and interim dividend declaration.
The Kolkata-based conglomerate, which dominates the cigarette and packaged foods market, is expected to report a single-digit increase in sales, while profits may see a decline due to lower tax benefits in the previous year.
Let’s take a closer look at what analysts expect from ITC’s Q3 earnings and the key highlights investors should watch out for.
ITC Q3 Results: What to Expect?
1. Revenue Growth Projection
- Analysts predict a modest single-digit growth in ITC’s revenue for the third quarter of FY25.
- The company’s diversified business portfolio, including cigarettes, FMCG, hotels, agribusiness, and paperboards, is expected to support overall revenue.
2. Expected Drop in Profit
- ITC’s profit after tax (PAT) may decline by up to 12% year-on-year (YoY).
- This decline is attributed to:
- Higher other income in the previous year
- A lower tax rate of 17% in the same period last year
3. Cigarette Business Performance
- The cigarette segment, ITC’s biggest revenue driver, is projected to grow by 3-4% YoY in volume terms.
- Strong pricing power and brand loyalty help ITC maintain leadership in this segment.
4. FMCG Segment Growth
- ITC’s FMCG business (excluding cigarettes) is expected to show steady growth, driven by:
- Higher demand for branded packaged foods
- Expansion of personal care and hygiene products
- Strong distribution network across India
5. Hotel Business Performance
- The hotel segment is likely to witness double-digit revenue growth due to higher occupancy rates.
- Increased business travel and festive season demand contributed to the hospitality sector’s growth.
6. Agribusiness & Paperboards Segment Outlook
- The agribusiness segment is expected to perform well due to strong exports and domestic demand.
- The paperboards and packaging division could face margin pressure due to fluctuating raw material costs.
ITC’s Dividend Announcement: What Investors Should Know?
- ITC’s board of directors will decide on an interim dividend for FY25 in today’s meeting.
- The company has consistently rewarded shareholders with regular dividends, making it a favorite among long-term investors.
Previous Dividend Trends
- Last year, ITC declared an interim dividend of ₹6 per share and a final dividend of ₹9.50 per share, maintaining a strong payout ratio.
- Investors are keen to see if ITC continues its dividend payout policy in line with past trends.
Key Factors Impacting ITC’s Q3 Performance
1. Inflation and Consumer Demand
- Rising inflation and input costs could impact consumer spending on premium products.
- However, ITC’s focus on affordable and mass-market products helps it maintain demand stability.
2. Competition in FMCG Segment
- ITC faces competition from established FMCG brands like HUL, Nestlé, and Dabur.
- However, its growing market share in packaged foods and personal care segments strengthens its position.
3. Regulatory Environment on Cigarettes
- Government policies on tobacco taxation and advertising restrictions continue to be a challenge.
- ITC’s strong distribution network and brand loyalty help mitigate the impact.
Market Reaction & Stock Performance
- ITC’s stock has shown strong performance in the past year, delivering steady returns to investors.
- Analysts suggest that today’s Q3 earnings report and dividend announcement could impact the stock’s movement in the short term.
Conclusion: ITC’s Q3 Earnings to Set the Tone for FY25
With a diversified business model and strong brand positioning, ITC remains a key player in the Indian FMCG and cigarette industry.
While a slight decline in profit is expected, steady revenue growth and a potential dividend announcement could keep investors optimistic.
