Hold ITC; target of Rs 304: Edelweiss

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26 Aug, 2025 12:21

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Edelweiss' research report on ITC
ITC’s Q1FY18 revenue dip of 1% YoY and EBITDA & PAT growth of 6.2% and 7.4% YoY, respectively, came in line with our estimates. Amidst GSTrelated destocking, cigarette and FMCG businesses clocked decent growth. Cigarette volumes rose 1% YoY (3% YoY in Q1FY17), improving from flattish in Q4FY17. Similarly, FMCG sales surge at 9.0% YoY (9.5% YoY in Q1FY17) was better than 6.5% YoY in Q4FY17; we expect the FMCG business to grow in double digits in FY18 aided by entry in new segments.

Outlook

We maintain ‘HOLD/SP’ and value ITC on SOTP on FY19E to arrive at target price of INR304. The stock is currently trading at 26.6x FY19E EPS.

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