ITC Ltd. share price target

Maintain BUY with a revised TP of Rs 270 (Rs 260 earlier) based on our PE multiple of 18x on FY24EPS. However, undemanding valuations, +5% dividend yield, and visible recovery across key businesses make it an attractive bet.

Overall gross margins contracted 310bp YoY to 52.6% in 1QFY22, while the EBITDA margin expanded 300bp YoY to 32.7%. Cigarette volumes are likely to have grown ~31% YoY (est. +22%). The volume decline in the base quarter was 37%. Cigarette net sales grew 34.2% YoY to INR43.8b. EBIT in Cigarettes grew 36.7% YoY to INR32.2b on a weak base (est. 44.6% growth YoY to INR34.1b), but declined 16.3% v/s 1QFY20 levels. In the base quarter (1QFY21) EBIT had declined 38.8% YoY to INR23.6b. EBIT margin for the Cigarettes biz expanded 130bp YoY to 73.5%....

ITC Limited (ITC) reported below expected numbers due to higher than expected rawmaterial inflation. Overall recovery in cigarette business, which reached nearly precovid levels during 4QFY21, was significantly impacted (13%QoQ revenue decline) due to restrictions on store operation during the 2nd wave. Progressive recovery in Hotel business witnessed severe impact (44% QoQ revenue decline). Positively, demand in FMCG and Agri Business remained resilient. Inflationary raw material prices contributed towards gross margin contraction but operating profit remained healthy due to cost savings and judicious price hikes. We have marginally trimmed our EPS estimates by c....

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....