ITC Share Price at New 52-Week High, Jumps 3% on Rising Q1 Net Profit; should you buy, sell or hold?

ITC’s share price jumped nearly 3% to a new 52-week high of 316.65 rupees each on BSE on Tuesday after the company’s consolidated net profit rose 33.46% year on year to reach Rs 4,462.25 crore in April-June 2022. The company had recorded a profit of Rs 3,343.44 crore in the corresponding quarter of the previous year. ITC shares surpassed their previous high of Rs 308.80 reached on Monday. Analysts see up to 15% upside potential in the stock, with a target price of Rs 355 each. Over the past year, ITC’s stock price has climbed over 50% and 42.13% so far this year. The stock is up more than 34% in the past six months and 7% in one month. Analysts noted that with the exception of the agriculture sector, where the wheat export ban could lead to relatively subdued growth in the coming quarters, momentum in other sectors is expected to remain robust.

Motilal Oswal Financial Services

BUY | Target Price: Rs 355 | Up: 15%

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Analysts at Motilal Oswal Financial Services turned constructive on the stock, helped by a better-than-expected demand recovery and healthy margin outlook in cigarettes, robust selling momentum in the consumer products, a lesser slowdown in hotel activity and better capital allocation in recent years. years. While valuations of global tobacco peers have returned to pre-COVID (Jan 2019) levels, at 18.8x FY24 EPS, ITC is still trading at a 26% discount to its valuations of January 2019 of 25.4x one-year forward EPS, they said. . “We see the possibility of further upside, based on a good earnings outlook,” analysts said.

Nirmal Bang Institutional Equity

ACCUMULATE | Target price: Rs 340 | Up: 10.6%

Analysts said inflationary headwinds played out in subdued consumer spending, with volume under pressure, particularly in rural markets. Although some moderation is seen in input prices, this remains a key element for ITC to watch, along with rural demand and restrictions on wheat exports. At the current market price, ITC is now trading at ~22x/20x FY23E/FY24E EPS. “We are downgrading ITC one notch below to accrue the buy rating sooner, with a revised target price (TP) of Rs 340 (Rs 310 earlier), valuing it at a multiple of around 22x on March EPS 24E, as the upside is less than 15%,” they said.

ICICI titles

ADD | Target Price: Rs 350 | Up: 13.8%

ICICI Securities analysts expect ITC stock to benefit from value expectation (based on current FCF profile) to outperform growth/expensive basket, potential cigarette price rises in l current inflationary environment (likely better consumer acceptance), good underlying performance in the FMCG of the business and improving outlook (cyclical recovery) for the hotel business. ICICI Securities noted that the main downside risk includes tax hikes well ahead of inflation causing volume pressure (on cigarettes) as price elasticity is still unfavorable.

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