Brokerage house Prabhudas Lilladher is bullish on ITC and has recommended 'Buy' rating on the stock with a price target of Rs 366 in its research report dated July 25, 2013.
Prabhudas Lilladher's report on ITC
"ITC reported PAT of Rs18.9bn on the back of 18 percent EBIT growth in Cigarettes even as Hotels and Paperboard businesses disappointed, resulting in Non-cigarette business EBIT growth of only 4 percent YoY, mainly led by 51 percent decline in losses in the FMCG business. Although Cigarette volume decline of 1.5 percent was disappointing, we expect a flattish volume growth in FY14. Paper business is likely to show improved profits due to 4-5 percent price increase, improving product mix and gradual increase in capacity utilisation. Hotels business remains under pressure due to decline in ARR and flat occupancy levels, recovery is unlikely before 2HFY14. New launches in FMCG have been well received and we expect the business to end the year with EBIT of Rs430m. We are increasing FY14 and FY15 estimates by 1.3-1.5 percent to factor in 18 percent EBIT CAGR in cigarettes and lower profitability in Hotels and FMCG. We value the stock at Rs366 on SOTP. We maintain 'BUY' on the stock," says Prabhudas Lilladher research report.
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