Buy ITC, target price Rs 485 Sharekhan by BNP Paribas

Sharekhan by BNP Paribas has buy call on ITC with a target price of Rs 485. The current market price of ITC is Rs 424.85.

ITC, incorporated in the year 1910, is a Large Cap company (having a market cap of Rs 526637.25 Crore) operating in Tobacco sector.

ITC key Products/Revenue Segments include Packaged Food Item, Agricultural Products, Paper & Paper Boards, Others, Tobacco Unmanufactured, Service (Hotel), Printed Materials, Other Operating Revenue for the year ending 31-Mar-2022.

Financials
For the quarter ended 31-03-2023, the company has reported a Consolidated Total Income of Rs 18244.54 Crore, down -.30 % from last quarter Total Income of Rs 18299.95 Crore and down -.04 % from last year same quarter Total Income of Rs 18252.64 Crore. Company has reported net profit after tax of Rs 5225.02 Crore in latest quarter.

The company’s top management includes Mr.Sanjiv Puri, Mr.Shyamal Mukherjee, Mr.Mukesh Gupta, Mr.Navneet Doda, Mr.Sunil Panray, Mr.Hemant Bhargava, Ms.Nirupama Rao, Ms.Meera Shankar, Mr.Arun Duggal, Mr.Shilabhadra Banerjee, Mr.David Robert Simpson, Mr.Ajit Kumar Seth, Mr.Anand Nayak, Mr.Sumant Bhargavan, Mr.Nakul Anand, Mr.Supratim Dutta. Company has S R B C & Co. LLP as its auditors. As on 31-03-2023, the company has a total of 1,243 Crore shares outstanding.

Investment Rationale
With no significant increase in tax on cigarettes, will help ITC to maintain volume growth momentum in the cigarette business in the coming quarters. Strong growth in the non-cigarette FMCG business and stellar recovery in the hotel business will drive double-digit revenue and PAT growth over the next two years. Despite strong run-up in ITC’s stock price in recent times, valuations at24x/21x its FY2024E/FY2025E EPS look attractive in the backdrop consistent earnings growth visibility and good dividend payout (dividend yield of 3.7%).

The brokerage maintains its Buy rating with a revised PT of Rs 485. The company remains one of the brokerage's preferred picks in the large-cap FMCG space.

Promoter/FII Holdings
Promoters held 0 per cent stake in the company as of 31-Mar-2023, while FIIs owned 43.35 per cent, DIIs 31.15 per cent.