Buy ITC: target of Rs 320: Sharekhan

Sharekhan is bullish on ITC has recommended buy rating on the stock with a target price of Rs 320 in its research report dated May 18, 2022.

Broker Research

May 20, 2022 / 21:44 IST

The research firm ICICI Securities believes earnings of apparel brands and retail companies under their coverage may surprise positively from Q3FY22E as the likely demand recovery may result in better than expected margin performance. Some of the costs savings achieved during pandemic may sustain and coupled with high operating leverage may lead to higher than pre-covid margins from Q3FY22E. Stocks like Trent, V-Mart and Aditya Birla Fashion and Retail are the preferred picks backed by their strong and consistent track record of execution.

26 Aug, 2025 12:21

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Sharekhan's research report on ITC

ITC posted a resilient performance in Q4FY2022 with gross revenues growing by growing by 16% (net revenues grew by 16.8%) largely led by strong double-digit growth across categories. OPM sustained at 33.6% on y-o-y basis despite high raw material inflation. Cigarette business sales volumes grew by ~9%; non-cigarette FMCG business grew by 12% and Agri business registered strong growth of 30% in Q4. Cigarette sales volumes are set to improve further as government has not hiked taxes on cigarettes for second consecutive year. Non-cigarette FMCG biz would grow in high single digit to low double digit while paperboard, paper & packaging business would clock strong double-digit growth in the near term.

Outlook

ITC paid a dividend of Rs. 11.5 per share for FY2022 (dividend yield of 4.3%). The stock is currently trading at 18.0x/16.3x its FY2023/24E EPS. We maintain Buy with revised PT of Rs. 320.

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