Buy ITC, target Rs 352: Anand Rathi

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26 Aug, 2025 12:21

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Anand Rathi

ITC has reported a growth of 14.9% in its standalone in Q3FY18. Revenue growth was driven by broad based growth across all the segments. Cigarettes business registered a volume growth of ~8% after factoring in the price hike taken in this segment.

On profitability front, the company’s operating margins have declined. The drop in the margins of cigarettes business was mainly on account of escalation in input costs due to consumption of higher cost leaf tobacco crop and increased salience of capsule cigarettes in the sales mix.

The FMCG-others segment posted a steady performance during the quarter with revenue growing by 11.5% led by Atta, Snacks, Premium cream Biscuits and Noodles in the Branded Packaged Foods Business, Fragrancing Products and Liquids (handwash & bodywash) in the Personal Care Products Business and Classmate Notebooksin the Education & Stationery Products Business.

Overall, the company has shown growth across all the segments. With strong operating cash flows, continuous capacity expansions across businesses and a healthy balance sheet, we have a positive view on the company over medium to longer term perspective.

We maintain our buy rating on the stock with a target price of Rs 352 per share.

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