Buy ITC; target of Rs 263: Geojit

Geojit's research report on ITC

ITC limited is a diversified conglomerate with presence in FMCG, Hotels, Paperboards & Specialty Papers, Packaging, and Agri-business. The company directly employs over 36,500 people across businesses. Standalone revenue rose 36.6% YoY (-8.1% QoQ) on the back of growth across verticals, partially hindered by lockdowns in Q1FY22. EBITDA surged 50.8% YoY, as EBITDA margin expanded 300bps YoY to 31.0% owing to better product mix and cost management. PAT also rose 28.6% YoY, partly offset by lower other income and higher taxes. COVID second wave played a spoilsport during Q1FY22 limiting growth.

Outlook

However, we expect performance to improve going forward on the back of demand growth. We hereby reiterate our BUY rating on the stock with a revised target price of Rs. 263 based on SOTP valuation.

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