Kotak Securities research report on ITC“ITC's 2QFY15 results came in ahead of our estimates, as cigarette net sales numbers reported by the company surprised positively. However, in our understanding, this is not reflective of demand or pricing, and the surprise is significantly attributable to inventories held by the company prior to the Budget. Going forward, we continue to believe ITC faces significant challenges in the cigarette business (~85% of it profits), which may lead to ITC underperforming FMCG peers in the long-run. Cheaper valuations relative to our coverage universe notwithstanding, we maintain SELL on ITC, with a price target of Rs 346 (cut from Rs 360 earlier),” says Kotak Securities research report.
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