ITC shares: Can bulls return to the FMCG counter this year?
ITC share price today: ITC stock slipped 1.35% to Rs 438.85 on BSE against the previous close of Rs 444.85 on BSE. Market cap of the firm stood at Rs 5.49 lakh crore
- Jan 13, 2025,
- Updated Jan 13, 2025 3:44 PM IST
Shares of FMCG firm ITC Ltd have disappointed investors in period up to a year. The FMCG stock could deliver double-digit returns of 42% in two years. It gained just 0.42% in a year, consolidating in a narrow range of Rs 471.55 on January 19, 2024 to Rs 441.05 in the current session. The stock touched levels of Rs 500 plus in August to September last year and hit a record high of Rs 528.55 on September 27, 2024.
However, the ITC stock has been on a slide since then. It has lost 17% from record high till date. The stock has turned weak in terms of technical analysis. ITC shares are trading lower than the 5 day, 10 day, 20 day, 30 day, 50 day, 100 day, 150 day and 200 day moving averages.
The stock has a PE ratio of 27.03 compared to the sector PE of 27.13. Its price-to-book ratio stands at 7.30.
In the current session, ITC shares slipped 1.35% to Rs 438.85 on BSE against the previous close of Rs 444.85 on BSE. Market cap of the firm stood at Rs 5.49 lakh crore. Total 5.36 lakh shares of the FMCG firm changed hands amounting to a turnover of Rs 23.62 crore on BSE.
In terms of technicals, the relative strength index (RSI) of ITC stock stands at 35, signaling it's trading neither in the overbought zone nor in the oversold zone.
Global brokerage Goldman Sachs has fixed the target price for the recently demerged ITC Ltd. at Rs 500 per share. It cited rising profitability and scale of its consumer business behind the bullish call.
The investment thesis is based on a steady recovery in cigarette business profit growth, Goldman Sachs said in a note. "Believe cigarette business is likely to deliver healthy earnings’ growth over fiscal 2023-25."
The profitability and the scale of the FMCG business is set to improve with a 12% revenue CAGR growth over fiscal 2022-27, the brokerage said in a report. The consumer business operating profit margin could expand to 12% by fiscal 2027 from 9% in financial year 2022, Goldman Sachs said.
B&K Securities said the downside is limited for ITC shares, considering the enhanced prospects from cigarette business, value unlocking from demerger of hotels business and likelihood of paper business returning to normal growth from next quarter.
"We are confident about our positive outlook on the stock considering the long-term annual volume growth of 4-5 per cent we are building in the cigarette business. We should also see a close to 500 bps jump in return ratios on hotel demerger. The stock is currently trading at a P/E of 23.8 times on FY27E EPS, we are maintaining our Buy rating on the stock with an unchanged target price of Rs 588, by assigning a P/E of 29x on FY27E EPS of Rs 20.40.
Centrum Broking has maintained positive outlook and suggested a target price of Rs 583 on ITC, implying a valuation of 31.6 times September FY27 EPS.
Shares of FMCG firm ITC Ltd have disappointed investors in period up to a year. The FMCG stock could deliver double-digit returns of 42% in two years. It gained just 0.42% in a year, consolidating in a narrow range of Rs 471.55 on January 19, 2024 to Rs 441.05 in the current session. The stock touched levels of Rs 500 plus in August to September last year and hit a record high of Rs 528.55 on September 27, 2024.
However, the ITC stock has been on a slide since then. It has lost 17% from record high till date. The stock has turned weak in terms of technical analysis. ITC shares are trading lower than the 5 day, 10 day, 20 day, 30 day, 50 day, 100 day, 150 day and 200 day moving averages.
The stock has a PE ratio of 27.03 compared to the sector PE of 27.13. Its price-to-book ratio stands at 7.30.
In the current session, ITC shares slipped 1.35% to Rs 438.85 on BSE against the previous close of Rs 444.85 on BSE. Market cap of the firm stood at Rs 5.49 lakh crore. Total 5.36 lakh shares of the FMCG firm changed hands amounting to a turnover of Rs 23.62 crore on BSE.
In terms of technicals, the relative strength index (RSI) of ITC stock stands at 35, signaling it's trading neither in the overbought zone nor in the oversold zone.
Global brokerage Goldman Sachs has fixed the target price for the recently demerged ITC Ltd. at Rs 500 per share. It cited rising profitability and scale of its consumer business behind the bullish call.
The investment thesis is based on a steady recovery in cigarette business profit growth, Goldman Sachs said in a note. "Believe cigarette business is likely to deliver healthy earnings’ growth over fiscal 2023-25."
The profitability and the scale of the FMCG business is set to improve with a 12% revenue CAGR growth over fiscal 2022-27, the brokerage said in a report. The consumer business operating profit margin could expand to 12% by fiscal 2027 from 9% in financial year 2022, Goldman Sachs said.
B&K Securities said the downside is limited for ITC shares, considering the enhanced prospects from cigarette business, value unlocking from demerger of hotels business and likelihood of paper business returning to normal growth from next quarter.
"We are confident about our positive outlook on the stock considering the long-term annual volume growth of 4-5 per cent we are building in the cigarette business. We should also see a close to 500 bps jump in return ratios on hotel demerger. The stock is currently trading at a P/E of 23.8 times on FY27E EPS, we are maintaining our Buy rating on the stock with an unchanged target price of Rs 588, by assigning a P/E of 29x on FY27E EPS of Rs 20.40.
Centrum Broking has maintained positive outlook and suggested a target price of Rs 583 on ITC, implying a valuation of 31.6 times September FY27 EPS.