Accumulate ITC Ltd; target of Rs 303: KRChoksey

KRChoksey's research report on ITC Ltd

ITC posted its Q4FY18 results which were in line with our estimates, revenue stood at INR 105 Bn (+8.3% Q0Q & -4.8% YoY). The top line was mainly driven by Food-FMCG and Hotels segment, which grew by 5.8% and 5.6% QoQ respectively. During FY18 revenue stood at INR 406.2 Bn (+1.3% YoY), the top line was mainly impacted by the de-growth in its Cigarettes segment (-30.7% YoY) due to lower volume sales.

Outlook

At the CMP of INR 271, ITC is trading at an P/E of 26.8x for FY20E, we assign a P/E multiple of 30x to arrive at a target price of INR 303 recommending a ‘ACCUMULATE’ rating on the stock representing a potential upside of 12%.