While the cigarette business places ITC in a relatively better position, it also attracts ESG concerns
In the recent months, there has been some excitement around the prospects of ITC Ltd’s cigarettes business. The expectation was that improved mobility and the easing of covid restrictions would help sales of cigarettes. Signs of this are visible. The company has said, cigarette volumes in the March quarter (Q4FY22) have surpassed pre-pandemic levels despite disruptions because of the Omicron wave. Analysts estimate last quarter’s cigarette volume growth at 9% year-on-year (y-o-y). Ebit (earnings before interest and tax) growth stood at 12%. Cigarettes are ITC’s mainstay, contributing 82% of the standalone segmental Ebit in Q4.