Buy ITC; target of Rs 350: Sharekhan

Sharekhan is bullish on ITC has recommended buy rating on the stock with a target price of Rs 350 in its research report dated August 01, 2022.

Broker Research

August 04, 2022 / 16:41 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 yet another quarter of strong financials in Q1FY2023 with revenues growing by over 40% y-o-y largely led by strong double-digit growth across categories. EBITDA margins sustained y-o-y despite inflationary pressures in the FMCG business. Cigarette business sales volumes grew by 25-26%; non-cigarette FMCG business grew by ~20%, Agri business registered strong growth of 82.7% and paperboard, paper & packaging business grew by 43.3%y-o-y. We expect growth momentum in cigarette sales volumes to sustain with government actions on curbing illicit cigarette sales. Hotels business will maintain strong growth momentum due to higher demand for domestic leisure travel. Non-cigarette FMCG revenues would grow in double digits while margins might improve sequentially in the coming quarters.

Outlook

ITC’s stock price has run-up by 19% in the past three months and is currently trading at 20.8x/18.0x its FY2023E/24E earnings. We maintain Buy with revised PT of Rs. 350.

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