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ITC share falls 2% post Q4 earnings; here's what brokerages say

Share of ITC touched an intraday low of Rs 209.35 falling 2.72% against previous close of Rs 215.20 on BSE

ITC share trades higher than 20 day, 50 day and 200 day moving averages but lower than 5 day and 100 day moving averages. ITC share trades higher than 20 day, 50 day and 200 day moving averages but lower than 5 day and 100 day moving averages.

ITC share fell over 2% today after the FMCG major reported its earnings for Q4 and fiscal ended March quarter.  Share of ITC touched an intraday low of Rs 209.35 falling 2.72% against previous close of Rs 215.20 on BSE.

Market cap of the firm fell to Rs 2.59 lakh crore on BSE. The large cap stock has lost 2.52% in last 2 days. The share trades higher than 20 day, 50 day and 200 day moving averages but lower than 5 day and 100 day moving averages.

Total 10.86 lakh shares changed hands amounting to turnover of Rs 22.92 crore on BSE. The stock has gained 6.85% in one year and risen 0.81% since the beginning of this year.

For fiscal year 2020-21, ITC's net profit stood at Rs 13,389.80 crore against net profit of Rs 15,584.56 crore in FY20.

Revenue from operations rose to Rs 53,155.12 crore in Q4 against Rs 51,393.47 crore in 2019-20.

The FMCG firm reported a consolidated net profit of Rs 3,816.84 crore in Q4 against net profit of Rs 3,926.46 crore in the January-March quarter of the previous fiscal.

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Revenue from operations stood at Rs 15,404.37 crore in Q4 against Rs 12,560.64 crore in the corresponding period of 2019-20.

ITC said its results for last quarter are not comparable with the earlier period as it also includes the revenue of Sunrise Foods, which it had acquired on July 27, 2020.

"The financial results of the group and ''FMCG Others'' of the quarter and the financial year ended on March 31, 2021 include those of Sunrise from July 27, 2020 and consequently are not comparable with previous periods," it said.

ICICI Securities said, "We increased our earnings estimates by 3-4%. Maintain ADD with a DCF-based target price of Rs 240. At our target price, the stock will trade at 18x P/E multiple March 23E. Key downside risk is tax hikes much ahead of inflation leading to volume pressure (on cigarettes) as price elasticity is still unfavourable."

YES Securities in an earnings update said, "We assume coverage on the stock with a BUY rating and a target price of Rs 266 based on 20 times FY23E earnings, a significant discount of 50-60% to sector peers and a 15% discount to its long-term average multiple. We also believe concerns on ESG and FMCG business growth/margin trajectory look overdone. While valuation remains cheap for the stock, the stock can continue to remain range bound for now given lack of positive triggers either on growth or corporate action."