Antique has maintained its ‘Buy’ rating on ITC with a target price of ₹563, representing a potential upside of 18.6% from the current market price of ₹474.50. The brokerage highlighted ITC’s resilience across key business segments, despite challenges in certain areas.
Key Highlights:
- Hotels Business:
ITC’s hotels segment is expected to sustain strong double-digit sales growth even on a high base, reflecting robust demand. - Cigarette Segment:
The cigarette business is projected to deliver volume growth of 3% and value growth of 6% in Q3, driven by its broad-based portfolio. - FMCG Business:
The FMCG segment is anticipated to outperform peers, though sharp raw material inflation could impact profit margins. - Agribusiness:
The agribusiness is expected to report healthy revenue growth, driven by favorable market conditions. - Paper Segment:
The paper business may face short-term pressure due to the dumping of Chinese paper and higher domestic wood prices.
ITC’s Strengths in the Current Environment:
- Diversified cigarette portfolio offering stability in the segment.
- Premium FMCG offerings positioned well to outperform the market.
- Buoyant hotels business contributing significantly to revenue.
- Improvements in agribusiness operations aiding overall growth.
Conclusion:
Antique emphasized ITC’s robust positioning amid challenges, driven by its diversified portfolio and broad-based growth across core segments. While raw material inflation might weigh on margins temporarily, ITC is well-placed to navigate the current environment effectively.
Disclaimer: This article is based on a brokerage report and is for informational purposes only. It does not constitute financial advice. Investors should conduct their own research or consult a financial advisor before making investment decisions.