Buy ITC, target Rs 300: Motilal Oswal

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Motilal Oswal has maintained a buy rating on ITC , with price target of Rs 300, in its report dated January 23, 2010. The stock closed at Rs 254.85 on January 25, 2010.

"ITC 3QFY10 results are in line with estimates as net sales grew 18.7% to Rs 45.8 billion (v/s estimate of Rs 44.8 billion), PAT grew 26.7% to Rs 11.4 billion (v/s estimate of Rs 11 billion). EBITDA grew 37.3% YoY to Rs 17 billion (v/s estimate of Rs 17 billion). PAT growth was higher due to a 63% growth in other income (higher dividend from subsidiaries and interest income on surplus). We are revising our EPS estimate for FY10 to Rs 10.8 (earlier Rs 10.5), for FY11 to Rs 12.8 (earlier Rs 12.3) and for FY12 to Rs 15 (earlier Rs 14.4). The stock trades at 19.5x FY11E EPS and 16.6x FY12E EPS. Maintain Buy with revised SOTP-based target price of Rs 300 (earlier Rs 292)," says Motilal Oswal report.

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