TCS share price jumps over 4% after Q4 earnings

TCS share price jumps over 4% after Q4 earnings

The FMCG-cigarette-to-hotel giant ITC's share of ITC went up over 4 per cent to hit a 52 week high of Rs 279.15 on BSE after the company posted a healthy set of numbers for the quarter ended March 2022, as well as a healthy set of numbers for the quarter.

The stock opened lower at Rs 264.20 amid a market sell-off. It was only 4 per cent larger than it was. The shares have a market capitalisation of Rs 3,40, 984.49 crore and are higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages.

The company had a year-on-year net profit of Rs 4,196 crore, up 11.7 per cent in the quarter ended March 31, 2022, up 11.7 per cent. The company had a net profit of Rs 3,755. In the year-ago period, 47 crore were made.

The segment of cigarettes had a revenue of 7,177 crore compared to Rs 6,508 crore in the same period last fiscal. The board recommended a final dividend of Rs 6.25 for the financial year ended March 31, 2022, according to the company.

Motilal Oswal noted thatcigarette volumes rebounded to pre-Covid levels and increased 9 per cent, year on year YoY in 4 QFY 22, above our estimate of 4 per cent, YoY.

The brokerage house pointed out that the resilient Cigarette margins of ITC render relatively better near-term visibility compared to peers in the ongoing environment where material cost inflation is a concern.

The re-rating of earnings will be dependent on diversification from cigarettes 81 per cent of FY 22 EBIT and whether sustained earnings growth returns to the late-teen levels seen in the first half of the last decade. It added that the stock has a target price of 265, and we maintain our Neutral rating on the stock.

Dolat Capital noted that illicit cigarette sales were the biggest hurdle for the ITC's cigarette business growth. We have increased FY 23 24 EEPS estimates to Rs 13.6 15.0 to include revenue and profitability improvement across segments in Q 4 FY 22, it said.

As the cigarette business started to gain market share from illicit trades, we believe that the margins would improve in the business. The stock was upgraded to Accumulate and raised our target price to Rs 293 SOTP valuation.