January 31, 2017 / 15:12 IST
ICICI Direct's research report on ITC ITC reported revenue growth of 4.5% YoY to Rs 13471 crore, above our estimate of Rs 12599 crore. Cigarette business grew marginally by 2.2% YoY due to the demonetisation. Agri business grew 12.9% YoY followed by hotel business, which grew 7.3% YoY. FMCG segment also grew modestly at 3.4% YoY. Paperboards, paper & packaging segment remained flat.
OutlookWe believe the cigarettes business would be able to sustain volume growth in the near term mainly due to the expectation of limited changes in indirect taxes in 2017 budget with the GST implementation by July 1, 2017. We believe ITC’s focus on growing its FMCG business by entering newer segments and tapping opportunity in foods segment would be a catalyst for topline growth in the long run. We maintain positive stance with a target price of Rs 288.
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