HSBC has raised its target price for ITC to Rs 580 from Rs 525, maintaining a buy rating. The brokerage emphasizes that all four factors shaping its investment thesis align favorably, enhancing ITC’s risk/reward appeal.
The widened discount to FMCG peers, a stable tax regime for cigarettes, and a formidable FMCG-Others business contribute to ITC’s attractiveness in the current volatile market environment.
However, HSBC cautions that downside risks include sensitivity to potential tax shocks, worse-than-expected cigarette volume growth, and slowness or market share loss in the FMCG-Others segment.
Despite these risks, HSBC believes ITC is well-positioned for growth, given its strong fundamentals and strategic initiatives. ITC’s diverse portfolio and strategic focus are expected to drive sustainable growth and shareholder value in the long term.
