Edelweiss' report on ITC
"Mr. Y. C. Deveshwar, Chairman, ITC, during the AGM underscored the company’s success in creating brands and leveraging the ‘Make in India’ vision. At the same time, he raised concerns on pictorial warnings and foreign funded NGOs targeting Indian cigarette companies. The Chairman reiterated the target of INR1tn FMCG turnover by 2030. ITC has earmarked INR250bn capex over the next 5 years for 65 projects in India. The company continues to engage with regulators and expects a rational budget in FY16 (taxes likely to dip in FY16 as 20% of cigarettes consumed in India are tax evaded). We envisage some respite for cigarette volumes in H2FY16 as consumers get accustomed to higher prices and the basebecomes favourable. Maintain ‘HOLD’ on attractive valuations with a target price of Rs 354", says Edelweiss research report.
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