ITC Ltd. share price target

ITC's business segments have been performing well on the back of demand growth, aiding topline performance. With margins expected to improve moving forward, we maintain our BUY rating on the stock with a revised target price of Rs. 256 based on SOTP valuation Decent performance in FMCG; Agri business outperforms Q4FY21 standalone revenue rose 24.1% YoY (+16% on comparable basis) to Rs. 14,023cr on account of robust recovery across all the segments boosted by increased demand for discretionary products. During the quarter, Cigarettes sales volumes...

While a better than expected performance in the Agri business led to a beat on sales, EBITDA and PBT were in line with our estimates. Volume and sales growth in Cigarettes, sales growth in FMCG Others, as well as a full year dividend payout were broadly in line with our expectations. Unlike other discretionary categories, which have reported a strong rebound, two-year average growth in Cigarette volumes as well as EBIT declined by ~2% each in 4QFY21. While the impact of lockdowns in 1QFY22 may not be as severe as that in...

ITC Limited (ITC) reported in-line results. Overall business witnessed strong recovery in discretionary and out of home products which grew 23%YoY (vs 5% decline in 3QFY21) while health, hygiene and food portfolio grew 13%YoY. Cigarettes business also witnessed continued recovery (volumes reached pre-covid levels towards the end of Mar'21) driven by progressive easing of restriction and increased mobility. Revenue growth of agri and paperboards, paper and packaging segment also remained very strong. Hotel business after breaking even in 3QFY21 recorded positive EBITDA of Rs 250mn in 4QFY21 driven by cost interventions and business recovery. On margins; except...

cigarette volumes, pick up in leaf tobacco and Agri exports and 8.9% FMCG EBIDTA margins in FY21. We believe lockdowns are temporary hiccups and expect smart pickup post 1Q. we believe stable cigarette taxation and FMCG profitability are key positives in near term. We expect Agri profitability to improve given strong surge in commodity prices and revival in leaf tobacco demand (20%+ margins). Hotels business remains under cloud but global...

We see decent uptick in growth across all of ITC's segments over the coming quarters. Though GoI's draft bill on sales of loose cigarettes may have some impact on its cigarette business in the near term, ITC's diversified portfolio is expected to deliver strong growth over the longer term. Hence, we reiterate our BUY rating on the stock with a rolled forward target price of Rs. 265 based on SOTP. Topline recovers on back of strong volume performance Q3FY21 standalone revenue grew 5.0% QoQ (+4.9% YoY) to Rs. 12,492cr, primarily...

Total FMCG segment revenue rose 5.1% to Rs 9060 crore during the period under review. In the FMCG segment, cigarettes revenue increased by 3.5% YoY to Rs 5498 crore while the revenue from other FMCG segment improved by 7.5% YoY to Rs 3562 crore during the quarter....

Total FMCG segment revenue rose 5.1% to Rs 9060 crore during the period under review. In the FMCG segment, cigarettes revenue increased by 3.5% YoY to Rs 5498 crore while the revenue from other FMCG segment improved by 7.5% YoY to Rs 3562 crore during the quarter....

Though we believe cigarettes volumes would recover to FY20 levels in the next two years with stable taxation, it would remain in negative growth territory in the long run. Further, pricing growth in cigarettes also has its limitation, which would also restrict pricing growth. Further, moderate tax increase once in two to three years cannot be ruled out. We expect muted...

ITC's 3QFY21 results were broadly in-line, with cigarette volumes declining ~7% YoY. Unlike other discretionary categories, no sharp sequential improvement is seen in Cigarettes. There was no respite on Cigarette EBIT either, with 8.1% YoY decline posted for 3Q implying that Cigarette EBIT growth has been below 10% for 24 of the past 26 quarters now. Growth in the FMCG-Others business has also tapered to the single digits on a reported basis as in-home consumption is no longer growing at the same pace. A sequential dip was reported in FMCG-Others margins, likely due to...

Maintain BUY with a revised TP of Rs. 260 (Rs. 215 earlier) as we revise our FY21/22E estimate and roll over to FY23E numbers. However, undemanding valuations, +5% dividend yield and visible recovery across key businesses makes it an attractive bet.