
Shares of ITC Limited surged 2.43% on January 8, trading at ₹451.80, following positive brokerage recommendations and upbeat expectations for its Q3 FY25 performance.
Key Drivers:
- Brokerage Ratings:
- Goldman Sachs: Maintains a ‘BUY’ rating with a target price of ₹500, indicating a potential upside of 13%. It cited steady recovery in ITC’s cigarette business, profitability improvement in FMCG operations, and stable tax policies as key growth drivers.
- Emkay Global Financial Services: Highlights ITC as one of the few FMCG players to report double-digit revenue growth YoY for Q3 FY25. However, it flagged potential operating margin contraction in the range of 200-450 basis points.
- Post-Demerger Optimism:
- Investors remain optimistic following ITC’s restructuring and focus on its core businesses, particularly the cigarette and FMCG segments.
Q3 Expectations:
- ITC’s cigarette business is expected to deliver strong earnings growth, aided by stable taxation and increased demand.
- FMCG EBITDA margins are projected to expand to approximately 12% by FY27, from 9% in FY22, supported by scaling operations and cost efficiencies.
Comparative Valuations:
- Other FMCG companies like Marico, Dabur, and Bikaji Foods International have also received favorable ratings for Q3, but ITC stands out for its consistent growth and diversified portfolio.
With positive outlooks from leading brokerages and robust quarterly performance expectations, ITC continues to attract investor confidence.
Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Always conduct your research or consult a financial advisor before making investment decisions.