ITC share price new target price: ITC share price today was trading range-bound on the BSE amid largely in-line June quarter (Q1) results for financial year 2024-25 (FY25).
At 12:00 noon, ITC share price was quoting 0.87 per cent lower at Rs 489.45 per share as against 727 points (0.89 per cent) fall in the benchmark BSE Sensex. During the day, ITC share price hit a high of Rs 499.35 per share and a low of Rs 484.3 per share.
Most analysts have raised their target prices marginally for ITC stock, and see up to 17.4 per cent upside from a one-year perspective.
ITC Q1 2024 results:
ITC, on Thursday, reported a 0.26 per cent year-on-year (Y-o-Y) decline in Q1FY25 net profit at Rs 5,091.6 crore, dragged by paper, paperboard and packaging, hospitality, and agri-businesses.
The comglomerate's consolidated gross revenue rose 7.5 per cent Y-o-Y to Rs 20,029.60 crore in Q1FY25, while revenue (net of excise) came at Rs 18,457 crore.
Segment-wise, ITC's gross cigarette revenue grew 6 per cent Y-o-Y led by volume growth of 3 per cent Y-o-Y, mix improvement, and price hikes.
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In the FMCG segment, revenue increased 6 per cent Y-o-Y, adversely impacted by the severe heat waves and slow packaged food growth. Ebit margin stood at 8.7 per cent in Q1FY25.
The paper business, meanwhile, faced challenges from demand issues, competition from China, lower pulp prices, and higher input costs, resulting in weak revenue and margins.
The agri business exhibited improvement during the quarter; however, stock limits on wheat and restrictions on exports hurt the business.
Hotels sustained healthy performance, though margins were hit by operating deleverage.
Against this, here are the new target prices for ITC stock:
BNP Paribas | Outperform | Target price: Rs 540
ITC has reported 9 per cent earnings CAGR over FY14-24, which is the median for our FMCG coverage over this period. The company offers the highest dividend yield in our FMCG coverage. Its growth outlook has improved in the years following the implementation of GST due to a stable taxation regime. We think its valuation looks attractive in an expensive Indian consumer stock universe.
ICICI Securities | Add | Target: Rs 530
ITC's Q1FY25 exhibited a resilient performance with improving cigarettes volumes growth trajectory, despite calibrated price hikes to navigate cost inflation. FMCG business displayed resilience against subdued demand conditions, while Hotels business witnessed another resilient quarter despite lower wedding days.
We increase our earnings estimates by 1-2 per cent for FY25E-FY26E modelling revenue/Ebitda/Net profit CAGRs of 11 per cent/13 per cent/11 per cent over FY24-26E.
Motilal Oswal Financial Services | Buy | Target: Rs 575
There are no material changes to our EPS estimates for FY25 and FY26. ITC's core businesses of cigarettes and FMCG are witnessing steady growth.
Besides, after the demerger of its asset-heavy hotels business, we expect ITC's return profile to improve. Margin improvements in the other FMCG business will further enhance return ratios and valuation multiples.
JM Financial | Buy | Target: Rs 550
The Government maintaining taxation on cigarettes in the recent budget augurs well for Cigarette business for organised players like ITC.
Further, FMCG business (festive and rural recovery) and Paperboard (weak base) should see recovery from H2FY24, thereby driving overall performance.
This, along with sharper capital allocation strategy post hotel demerger, will drive overall return profile. We maintain our positive stance on the company.
Emkay Global | Add | Target: Rs 520
Given the lack of any near-term catalysts, we expect the stock to stay rangebound. We remain long-term positive on the stock, as we see ITC's businesses aligning well with economic growth.
We await the next leaf tobacco cycle and cyclical recovery in other businesses, before turning positive. We retain 'Add' on limited upside with a new June, 2025, target price of Rs 520 vs Rs 470 earlier.
Kotak Institutional Equities | Add | Target: Rs 535
Given the largely muted performance in Q1FY25, we cut our revenue estimates for FY25/26/27 by 2.2 per cent/2.1 per cent/2.3 per cent.
Further, we trim FY25 net profit at EPS estimate by 1.4 per cent each, FY26 by 1.3 per cent each, and FY27 by 0.8 per cent each.
That said, ITC expects a pick-up in consumption demand, led by moderating inflation, improving agri terms of trade, expectation of normal monsoons and the Government's thrust on the public infra and rural sector.
We revise our stock fair value to Rs 535 from Rs 500, as we ascribe 22X September 2026E P/E to the cigarettes segment (20X earlier).
Nuvama Institutional Equities | Buy | Target: Rs 580
We expect legal cigarette players to gain market share from illegal players (almost one–fourth of market) given no tax hike in the union budget for FY25. Being the largest legal player, ITC would be a key beneficiary.
ITC continues to counter illicit trade and reinforce market standing by fortifying the product portfolio through innovation, democratising premiumisation across segments and enhancing product availability. ITC has also bolstered its presence in key markets by launching several unique products across different segments.
Furthermore, rains in India are now 2 per cent above normal after a deficit for the past entire month and a likely rural consumption revival H2FY25 onwards shall benefit ITC's cigarette, FMCG and agri business.
To better account for this, we are increasing ITC's cigarette business target multiple to 24x (from 22x), leading to a revised target price of Rs 580 (earlier Rs 540).
