Neutral ITC; target of Rs 265: Motilal Oswal

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Motilal Oswal's research report on ITC

ITC’s 4QFY22 EBITDA and PAT growth came in line with our estimates.  Cigarette volumes reportedly rebounded to the pre-Covid levels and grew 9% YoY (calculated) in 4QFY22, above our estimate of 4% YoY. In the ongoing environment where material cost inflation is a worry, ITC’s resilient Cigarette margins render relatively better near-term visibility v/s peers. Longer term re-rating though will depend on diversification from cigarettes (81% of FY22 EBIT) and whether sustained earnings growth returns to the late-teen levels seen in the first half of the last decade.

Outlook

We maintain our Neutral rating on the stock with a TP of INR265.

For all recommendations report, click here

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