Saturday, July 30, 2011

Stock Idea: ITC

Just when the Street had got disenchanted with the numbers of HUL, the performance of ITC came in and it spread a lot of cheer. On a 20% rise in net sales at Rs.5768 crore, the company for Q1FY12, on a YoY showed a 24.51% rise in net profit at Rs.1333 crore. Raw material cost was up 26%. The company has other income component of Rs.144 crore v/s Rs.98 crore in Q1FY11. Even if we remove this component, the rise in net profit is over 22%. Clearly, the bottomline has essentially been driven by the topline.
Cigarettes remained its main bread earner. It showed a 16% rise in revenue and 21% rise in EBIT. FMCG products showed a 20% rise in revenue and loss of Rs.76.28 crore, which is 14% lower than the loss of Q1FY11. Hotels revenue registered a 9% rise, 33% rise in EBIT. Agri revenue rose 26% with a 21% rise in EBIT while paper showed a 21% rise in revenue as well as EBIT. Overall, all segments have shown an improvement. The company had declared a 1:1 bonus and equity capital has thus shot up from Rs.381.82 crore to Rs.773.81 crore. And even post the bonus, the company is sitting on a jaw dropping reserve of Rs.15126.12 crore. Another positive point in favour the company is that its interest outgo for Q1FY12 at Rs.16.45 crore was just 0.28% of the net sales of the quarter. Surely a stock to own for long term.
Source: Internet (by S P Tulsian)

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