What should investors do with ITC post Q4 earnings: Buy, sell or hold?

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26 Aug, 2025 12:21

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ITC share price fell 2 percent in early trade on June 2, a day after the company declared its March quarter earnings.

The company's standalone profit declined to Rs 3,748.4 crore compared to Rs 3,797 crore reported in the year-ago quarter.

Standalone revenue from operations (excluding excise duty) in Q4FY21 grew by 22.6 percent to Rs 13,294.7 crore YoY, while revenue (including excise duty) rose 24 percent YoY to Rs 14,156.96 crore during the quarter.

Also Read - ITC Q4 profit falls 1.3% to Rs 3,748.4 crore, revenue growth at 22.6% beats estimates

Here is what brokerages have to say about the stock and the company after the March quarter earnings:

JPMorgan | Rating: Neutral | Target: Rs 225

The in line Q4 EBITDA was boosted by agri. The cigarette growth was underwhelming, while other FMCG/paper was in line. The dividend payout rose in F21 to 100%, however, valuation at 16x F23e P/E are undemanding.

UBS | Rating: Buy | Target: Rs 260

The cigarette volumes recovered to pre-COVID levels in Q4. FMCG (non-cigarette) ramp-up continues.

Morgan Stanley | Rating: Overweight | Target: Rs 251

The revenue growth was ahead of our estimate, however, earnings were in line with our expectation & consensus.

CLSA | Rating: Buy | Target: Cut to Rs 265 from Rs 275

CLSA cut earnings estimates for its cigarette business by 3%. The inflationary setting is likely to influence its near-term margin, while remain confident in the improving margin trajectory for other FMCG business

Goldman Sachs | Rating: Buy | Target: Rs 242

The EBIT was a miss on cigarette volumes & FMCG margin. The valuation does not fully reflect the combination of yield & growth potential. The bokerage lowered FY22-24 EPS estimates by 4-7% post result. The cuts were largely driven by lower volume/margin in the tobacco segment.

Sharekhan | Rating: Buy | Target: Rs 265

We have fine-tuned our earnings estimates to factor in better-than-expected revenue in the agri business, hotels and non-cigarette FMCG businesses and lower margins due to change in mix.

With no major increase in taxes on cigarettes in Union Budget, we expect cigarette sales volume to normalise in the coming quarters (Q1FY2022 might see an impact of lesser operating hours of stores).

Management’s enhanced focus and redefined growth strategies have aided scaling up of the non-cigarette FMCG business margins. Higher focus is on supply agility and reduction in operating cost in the near term.

Prabhudas Lilladher | Rating: Buy | Target: Rs 258

We believe stable cigarette taxation and FMCG profitability are key positives in the near term. We expect agri profitability to improve given the strong surge in commodity prices and a revival in leaf tobacco demand (20%+ margins).

Hotels business remains under the cloud but global trends suggest a significant pick up in travel in H2 2022.

We believe double-digit EBIDTA margins in FMCG business by FY22/23 and a relative stable cigarette tax regime cap any downside.

Motilal Oswal | Rating: Neutral | Target: Rs 220

With PBT growth over FY20-23E (7.4% CAGR) likely to remain similar vis-à-vis weaker growth in the preceding five years (6.6% CAGR), valuations of 17.5x/15x FY22E/FY23E, although cheap, are fair considering the stated concerns. Dividend yield of 5-6% is expected over the next two years, in line with global Cigarette players.

At 09:18 hrs ITC was quoting at Rs 210.45, down Rs 4.75, or 2.21 percent on the BSE.

The share touched a 52-week high of Rs 239.15 and a 52-week low of Rs 163.40 on 09 February 2021 and 29 October 2020, respectively.

Currently, it is trading 12 percent below its 52-week high and 28.79 percent above its 52-week low.

Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.