Jefferies has maintained a ‘Buy’ rating on ITC Limited, setting a target price of ₹550, implying a 26.5% upside from the current market price (CMP) of ₹434.65. The firm emphasized that the upcoming Union Budget remains a key event for tobacco taxation, which could impact the company’s financial outlook.
Jefferies has factored in a 5% effective tax rate hike, which it views as manageable. However, a 5-9% tax increase could present challenges, though ITC is expected to offset this through a 3-4% product price hike. The firm also highlighted that the last change in tobacco taxation occurred in 2023, leading to a 2% increase in tax per stick.
Despite these tax concerns, Jefferies believes that ITC continues to trade at a 45-50% discount to its peers, making it an attractive investment at current levels.
Target Price: ₹550
Current Market Price (CMP): ₹434.65
Disclaimer: The above information is for informational purposes only and should not be considered as financial advice. Investors are advised to conduct their own research or consult with a financial advisor before making any investment decisions.
