Buy ITC, advises Varun Lohchab

Varun Lohchab, Head-India Research at CIMB Equities told CNBC-TV18, "We have a buy rating on ITC. It is actually the only FMCG stock where we have been positive since the beginning of the year. This quarter, in terms of cigarettes, volume will again be weak but from next quarter second half you will see the base getting favourable. In this quarter, we are expecting around 11-12 percent drop in cigarette volumes. Cigarette EBIT will grow by around 7-8 percent in our view which is better than what they reported in Q1. Second half will get better for ITC in great volumes and overall EBIT growth.""For most of the other staple names, we don’t think the second half will also be anything great because the margin expansion tailwind will start coming into the base. So, ITC this quarter will not be any kind of great show. It will be steady with 7-8 percent EBIT growth in cigarette and overall profit after tax (PAT) growth of also around 8 percent. Second half should be better for ITC compared to the first half," he added.