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The home analysis and broking agency has a goal of Rs 335 per share, an upside of 27 p.c.
June 16, 2022 / 10:33 AM IST
ITC, ITC inventory, FMCG inventory
ITC share worth edged greater intraday on June 16 after Motilal Oswal upgraded the inventory to purchase from impartial.
The home analysis and broking agency has a goal of Rs 335 per share, an upside of 27 p.c.
In line with Motilal Oswal, higher than anticipated demand restoration, wholesome margin outlook on cigarettes, gross sales momentum within the FMCG enterprise, decrease drag from the inns enterprise, and higher capital allocation in recent times have led to the improve.
“A secure tax atmosphere for cigarettes in recent times has allowed ITC to calibrate worth will increase to keep away from a disruption in demand. We anticipate this development to proceed and may lead to improved cigarette volumes and earnings visibility over the medium time period. The breadth of ITC’s FMCG product portfolio provides it a bonus in a quickly altering demand atmosphere. Its management place in some classes provides it pricing energy to offset incremental enter value pressures in different classes, the place pricing energy just isn’t as sturdy,” it stated.
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“The resilient nature of its core enterprise, amid an unsure atmosphere within the sector, and 4-5% dividend yield make the agency a great defensive wager within the ongoing unstable rate of interest atmosphere. Earnings CAGR (compound annual development charge) on the revenue earlier than tax degree stood at 5% over FY17-22. We anticipate ITC to put up 15% earnings CAGR over FY22-24,” it added.
Motilal Oswal values ITC at 21x FY24 earnings per share, a 65% premium to international peer common. It believes the premium multiples are justified, given its sturdy visibility over the medium time period and the defensive nature of its enterprise, particularly in a unstable macro atmosphere.
At 10:10 am, the inventory was buying and selling at Rs 265.30, up Rs 1.80, or 0.68 p.c. It has touched an intraday excessive of Rs 267.85 and an intraday low of Rs 264.75.
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