Stable taxes in FY19 accelerated cig volume growth to 5.5% vs. -5% CAGR during FY15-18. EBIT growth also accelerated to 9% vs. 7% CAGR during FY15-18. Still ITC did not enjoy a re-rating as investors flocked towards ITC's peers (HUL, Dabur and Britannia etc.). Rather cig business saw a de-rating (>20% fall, based on assigning fair valuation to other segments) over the last 12-months. We expect cig valuation will recover owing to (1) Continuation of stable taxes, (2) EBIT margin expansion and (3) Pickup in rural market. We believe cig valuation will recover to its avg. of 18x EV/EBITDA (still lower than 25x for Colgate which is similar wrt market leadership, vol growth trajectory and pricing power). Other catalyst in the business is FMCG, with scope for margin expansion. We continue to believe that valuation discount will narrow. ITC clocked in-line performance, with no deceleration vs. 1Q (most consumer cos were impacted by slowdown and floods). Cig rev/vol/EBIT growth of 6/3/7.4% was steady. FMCG and Hotels outperformed with rev/EBITDA growth of 6.5/39% and 18/37%. ITCs earnings growth (ex-corp tax benefits) of 10% has been steady over the last 8 quarters, still stock has been de-rated. We believe de-rating is unwarranted when the co is consistently showing quality earnings. We value ITC on SoTP basis and arrive at a TP of Rs 368 (implied P/E of 25x). Maintain BUY.