Buy ITC; target of Rs 230: Firstcall Research

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Buy ITC; target of Rs 230: Firstcall Research

Firstcall Research is bullish on ITC and has recommended buy rating on the stock with a target of Rs 230 in its January 30, 2012 research report.

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Firstcall Research is bullish on ITC and has recommended buy rating on the stock with a target of Rs 230 in its January 30, 2012 research report.

"ITC Ltd. a public conglomerate company headquartered in Kolkata, India. Its turnover is $7 billion and a market capitalization of over $33 Billion. It started off as the Imperial Tobacco Company, and shares ancestry with Imperial Tobacco of the United Kingdom, but it is now fully independent, and was rechristened to Indian Tobacco Company in 1970 and then to I.T.C. Limited in 1974. ITC Limited completed "100 years" on 24 August 2010. ITC Ltd. has diversified presence in FMCG, Hotels, Paperboards and Packaging, Agri Business and Information Technology. The Company is currently focused on four business groups: FMCG, Hotels, Paperboards, Paper & Packaging and Agri Business."

"ITC Ltd. has reported net profit of Rs 17009.80 million for the quarter ended on December 31, 2011 as against Rs 13890.80 million in the same quarter last year, an increase of 22.45%. It has reported net sales of Rs 62478.40 million for the quarter ended on December 31, 2011 as against Rs 55137.40 million in the same quarter last year, a rise of 13.31%. Total income grew by 14.48% to Rs 65329.60 million from Rs 57067.80 million in the same quarter last year. During the quarter, it reported earnings of Rs 2.18 a share."

"At the current market price of Rs.201.35, the stock is trading at 25.30 x FY12E and 22.12 x FY13E respectively. Earning per share (EPS) of the company for the earnings for FY12E and FY13E is seen at Rs.7.96 and Rs. 9.10 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 15% and 20% over 2010 to 2013E respectively. On the basis of EV/EBITDA, the stock trades at 16.05 x for FY12E and 14.12 x for FY13E. Price to Book Value of the stock is expected to be at 7.06 x and 5.35 x respectively for FY12E and FY13E. We expect that the company will keep its growth story in the coming quarters also. We recommend 'BUY' in this particular scrip with a target price of Rs 230 for medium to long term investment," says Firstcall Research report.   

Non-Institutions holding more than 90% in Indian cos

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To read the full report click on the attachment