Sharekhan has given Buy recommendation for ITC with a target price of Rs. ekhan is bullish on ITC has recommended buy rating on the stock with an unchanged PT of Rs. 280 in its research report issued on Oct 27, 2021

Outlook

Cigarette business sales volumes are expected to improve in the coming quarters with easing of lockdown restrictions in most states. Management’s enhanced focus and redefined growth strategies have aided scaling up of the non-cigarette FMCG business margins. The stock is currently trading at 17.1x and 15.3x its FY2023 and FY2024 EPS, respectively, which is at a stark discount to some of the large consumer goods stock. Strong earnings visibility with improving growth prospects of the core cigarette business, margin expansion in the noncigarette FMCG business, and high cash-generation ability with strong dividend payout will reduce the valuation gap in the coming years. We maintain our Buy recommendation on the stock with an unchanged PT of Rs. 280.

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