Sharekhan has given Buy recommendation for ITC with a target price of Rs. 402 in its research report issued on Oct 20, 2022

Sharekhan’s research report on ITC

ITC posted yet another quarter of strong numbers in Q2FY2023 with revenues and PAT growing by 27% and 21% respectively. OPM stood flat at 36.4% despite inflationary pressures in the FMCG business. Cigarette business sales volumes grew by over 20%; non-cigarette FMCG business grew by 21%, Agri business registered strong growth of 44% and the paperboard, paper & packaging business grew by 25% y-o-y. We expect growth momentum in the cigarette sales volumes to sustain with government actions on curbing illicit cigarette sales. The hotels business is expected to post strong performance in H2 due to a strong business period. Non-cigarette FMCG revenues would grow in double digits while margins might improve sequentially in the coming quarters.


ITC’s stock price has run-up by 35% in the past six months and is currently trading at 20.9x/18.9x its FY2023E/24E earnings. We maintain Buy with revised PT of Rs. 402.

Leave a Reply

Your email address will not be published. Required fields are marked *