ITC reported a 28.62 percent surge year-on-year in its standalone net profit at Rs 3,013.49 crore. The FMCG major had reported a net profit of Rs 2,342.76 crore in the corresponding quarter of the previous fiscal.

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ITC's revenue from operations increased 36.4 percent to Rs 12,959.15 crore and revenue (excluding excise duty) jumped 37 percent to Rs 12,217.13 crore.

ITC's Q1FY22 results: Key highlights

—Its gross revenue stood at Rs 12,884.45 crore—up 36.6 percent YoY.

—Its operating profit fell 11 percent to Rs 3,992.16 crore QoQ

—Its operating margin stood at 30.8 percent against 31.6 percent QoQ. However, its margin expanded 32.7 percent against 29.7 percent in the previous quarter.

—Its earnings before interest, taxes, depreciation and amortization (EBITDA) grew 50.8 percent to Rs 3,992.16 crore.

—Its cigarette segment revenue grew 33 percent YoY to Rs 5,122 crore, but it fell 12.6 percent to Rs 5,122.19 crore QoQ.

—Revenue from the agri-business segment was up 9 percent to Rs 4,091 crore and it rose 21.4 percent to Rs 4,091.27 crore QoQ.

Here's what brokerage say:

Motilal Oswal

Motilal Oswal has a 'neutral' rating on the stock with a target price of Rs 225 on the backs of uncertain EBIT growth.

ITC's reported EBITDA was better-than-expected, the brokerage said. But the Cigarettes and Paper and Packaging sales were offset by weaker than anticipated EBIT margins, it added.

Cigarette EBIT was up 36 percent YoY in the first quarter of FY22, but it was still lower 16 percent lower than the corresponding quarter of FY20.

In the FMCG—Others segment, the brokerage believes the rise in commodity costs poses a risk to segmental EBIT margin improvement in FY22, especially given the likely impact on the second quarter as well.

The brokerage further said while its net revenue, EBITDA, PBT, and PAT rose 37, 50, 28, and 28 percent, respectively, its overall gross margins contracted.

Citi

The brokerage has a 'neutral' rating on the stock with a target price of Rs 210 per share. The brokerage said that operationally, there were no major surprises in the first quarter results across ITC's various segments.

Its revenue and EBITDA grew 37 and 51 percent, respectively, on a very low base of the previous year and lower other income led to a weaker-than-expected profit of Rs 3,010 crore versus our estimate of Rs 3,230.

Emkay Global Financial Services

The brokerage has a 'buy' rating on the stock with a target price of Rs 270. It said the first-quarter performance was "ahead of expectations" with EBIT up by 49 percent on better performance of cigarettes and margin gains in the paper.

"Cigarette sales and EBIT were ahead of estimates and less impacted by the lockdown, indicating better execution and share gains vs peers," it said. The recovery trends are faster than last year, and can offer some upsides to our FY22 forecast, it added.

CLSA

CLSA has a 'buy' call on ITC shares with a target price of Rs 265 per share. It said the Cigarette EBIT margins expanded 210 basis points YoY aided by positive operating leverage and the stock holds potential for further expansion.

With expected normalcy, the brokerage expects to see a recovery in its overall business and margin profile with steady expansion in its margin and reduction in the Capex. The brokerage said its K-shape growth trend will continue.

ICICI Securities

The brokerage had a 'buy' rating on the stock at a target price of Rs 212 on the backs of the rise in cigarette volume by nearly 30 percent. The brokerage said, the rise in volumes due to lower disruption in the second wave and swift recovery post-normalcy (vs last year), is reassuring.

FMCG revenues grew over 10 percent YoY despite pocket of weakness but at a moderated pace, it added. The company's other businesses reported a good performance as well, ICICI Securities said.

"We highlight that ITC has high revenue salience from South India and hence stricter lockdowns in Kerala and Tamil Nadu has likely impacted the 1QFY22 performance )one-off)," it said.

The brokerage sees potential market share gains in the cigarettes, FMCG scale-up and profitability improvement, and potential to accelerate cost saving through a supply chain recast.

Morgan Stanley

Morgan Stanely has an 'overweight' call on the ITC stock with a target price of Rs 251 per share as the revenue and profits reported by ITC are ahead of its estimates. Cigarette volumes are up 33 percent YoY and it is ahead of our consensus of 28-24 percent, Morgan Stanley said.

Earnings are better led by a better-than-expected performance in all businesses except FMCG, it said.

The share price of ITC was down 0.45 percent to Rs 211.40 on BSE.

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