KR Choksey has given Buy recommendation for ITC with a target price of Rs. 310 in its research report issued on Dec 16, 2021

KR Choksey’s research report on ITC

ITC Ltd held its first ever virtual Investor & Analyst meet where the management set out key strategies for growth of the company. Multiple growth drivers, innovation and R&D, cost optimization, sustainability, digitization, and leveraging world-class talents are the six pillars on which ITC’s future strategies are built. The ‘ITC NEXT’ is focusing on redefining its product portfolio, premiumization, exports business, identifying opportunities in proximal markets, identifying newer routes to the market, enhancing its distribution reach, and accelerating digitization to help drive revenue and profitability.

Outlook

We value ITC shares using an SOTP (Sum of the parts) approach implying 10.1x EV/EBITDA on FY24E to Cigarette business; 18.8x EV/EBITDA on Hotel segment; an average 5.5x EV/EBITDA on Agri/Paper business; and 10.2x on EV/Revenue on FMCG segment – which yields a target price of INR 310 per share; an upside of 38.4% over the CMP. Accordingly, we re-iterate our “BUY” rating on the shares of ITC Ltd.

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