ITC Q1 results: Brokerages retain 'buy' on urban revival, broad based growth; check share price target

ITC Q1 results: Brokerages retain 'buy' on urban revival, broad based growth.

Global brokerage houses have retained their ‘buy’ rating on ITC Ltd, citing early signs of urban consumption revival and broad-based growth across segments, following the company’s first-quarter earnings announcement.

The FMCG-to-cigarettes conglomerate reported a 21 percent year-on-year growth in net revenue (excluding hotels) for the April-June quarter, while EBITDA rose by approximately 3 percent. However, margins contracted across key business segments.

In its research note, Jefferies said urban demand is showing signs of a rebound and a normal monsoon could further support rural consumption, providing a balanced demand outlook for the company. It added that lower inflation, tax cuts, and expected reductions in interest rates would likely bolster consumer sentiment and sustain growth in the coming quarters.

"We retain our ‘Buy’ rating on reasonable valuations, with an unchanged price target of Rs 535," Jefferies said. The brokerage also noted that ITC’s cigarette volume growth accelerated to multi-quarter highs, surpassing estimates, and the company continued to outperform several of its FMCG peers.

ITC Q1 results: Net profit flat at Rs 4,912 crore

Nuvama also maintained its ‘buy’ rating, pointing to early signs of urban consumption revival and consistent growth across ITC’s business verticals as key positives.

"We are revising up our FY26E/27E revenue estimates by 3 percent and 4 percent, respectively. However, due to margin pressure, we are cutting FY26E/27E EPS estimates by 2 percent each. This results in a revised sum-of-the-parts target price of Rs 540, up from Rs 532," Nuvama said in its report.

Brokerages also highlighted the growth momentum in ITC’s new business vectors such as sustainable packaging and FoodTech. The FoodTech business, a critical component of ITC’s ‘Next’ strategy, crossed Rs 1 billion in gross merchandise value (GMV) in FY25 and now operates over 60 kitchens across five cities in South and West India.

Additionally, Nuvama noted that ITC’s value-added agri portfolio has expanded 2.2 times over the past four years, reinforcing its efforts to diversify revenue streams.

International brokerage Morgan Stanley maintained its 'overweight' call with a price target of Rs 500 per share, noting that the beat in the revenue was driven by ITC's agri business. Citi has a 'buy' rating, while Macquarie reiterated an 'outperform' rating on ITC, both issuing a target price of Rs 500.

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