Accumulate ITC; target of Rs 455: Prabhudas Lilladher

Prabhudas Lilladher recommended accumulate rating on ITC with a target price of Rs 455 in its research report dated May 18, 2023.

Broker Research

May 20, 2023 / 11:17 IST

accumulate

26 Aug, 2025 12:21

Volume

Todays L/H

Prabhudas Lilladher's research report on ITC

Cigarette volume growth for 4Q was 12% supported by broad based premiumisation in longs and king size cigarettes. Near term looks favourable with expectations of mid-single digit volume growth. Although FMCG margins got a boost due to PLI and state incentives, FY24 should gain from benign input costs. Hotel outlook is positive due to G20 & revival in business and foreign tourist travel. Paper & Paperboard segment was impacted due to weakness in market coupled with expansion related shutdowns, expect margins to recover from 4Q levels. While near term outlook is strong, we estimate 10.7% EPS CAGR over FY23- 25. ITC has scope to increase cigarette profitability as current EBIDTA margins are 5ppt lower than peak margins. ITC trades at 22.8x FY25 EPS with ROE/ROCE of 30%+/35%+ and ~80%+ dividend payout. Retain Accumulate.

Outlook

We increase our FY24/FY25 EPS by 1.6%/1.4% and target price to Rs455 (Rs444 earlier) as we roll over to FY25.

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