Download ITC+-++Citi++-+24+10+08

ITC (ITC.BO)
Buy: 2QFY09 – Results Above Expectations
 PAT growth +4% Y/Y — ITC’s 2Q results were ~6% above our (subdued)
estimates, marginally 2% below consensus estimates. Key variance was
attributed to 190bps EBITDA margin compression (at 29.7%, 130bps below
estimates) as ad spends on the FMCG business rose substantially.
 Cigarette segmental EBIT +17% Y/Y — This was driven by revenue growth of
c11% and c130bps margin expansion (both Y/Y and Q/Q). Overall segmental
performance was slightly ahead of expectations. 2Q cigarette volumes were –
c3% Y/Y.