Rajesh Agarwal of Eastern Financiers feels ITC is a must have in a long term portfolio due to its strong management and balance sheet.
Agarwal told CNBC-TV18, “Talking about the fundamentals, there cannot be a better play if you are looking at Indian consumption story rather than ITC. It is a must have in long-term portfolio be it fast moving consumer goods (FMCG), cigarettes, apparels, hotels everything is under single company. I think it is just a matter of time when the stock starts performing. At this point of time at 30 times earnings it might look expensive to some people. But still with the kind of history it has, the strong management, strong balance sheet and not to forget the cash position this company has in its balance sheet is a must have in a long-term portfolio.”
He further said, “For the investor who is there for a very short-term and is worried about the tax being implemented in the coming Budget, there can be a kneejerk reaction with the kind of noise being there in the entire world about tobacco products. But with FMCG business of this company on a verge of being profitable in the very near future, one should increase time horizon and be in the stock.”
“I do not think there is much to lose even if taxes are imposed. There might be a kneejerk reaction that the stock might go down by Rs 10-20 but it would recover just because of the fact that its other businesses are doing well. A price target of around Rs 325 for a very short-term period is quite possible and for a longer term horizon it is a must have in one’s portfolio,” Agarwal added.