Buy ITC; target of Rs 515: Motilal Oswal

Motilal Oswal is bullish on ITC has recommended buy rating on the stock with a target price of Rs 515 in its research report dated May 24, 2024.

Broker Research

June 11, 2024 / 14:11 IST

BUY

26 Aug, 2025 12:21

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Motilal Oswal's research report on ITC

ITC's Cigarette and FMCG performance was healthy, while the nonconsumer business (Paper and Agribusiness) remained weak. Consolidated revenue grew 2% YoY (est. +4.5%). The Cigarette revenue increased 7.5% YoY, with volume growth of ~2% YoY (in line), price hikes of 3-4%, and remaining through mix improvement. The premium cigarette segment continued to outperform, while the value segment remained weak. The Paper business was hit by demand issues, competition from China,
lower pulp prices, and higher input costs. Both revenue and margin were weak; however, a gradual recovery is likely in FY25. Agribusiness continued to see a contraction in FY24, due to trade restrictions on agri-commodities. Hotels posted a robust performance, with strong ARR and occupancy. Reiterate BUY with an SOTP-based TP of INR515 (based on 28x FY26E P/E).

Outlook

The resilient nature of its core business, amid an uncertain industry environment, and its 3-4% dividend yield make ITC a good defensive bet in the ongoing volatile interest rate environment. Reiterate BUY with an SOTP-based TP of INR515 (based on 28x FY26E P/E).

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