With ITC flirting with its all-time high level of Rs 354, shares owned by small individual investors and HNIs in the FMCG major have crossed Rs 55,000 crore mark in market value. This is even as retail investors have back-to-back trimmed their stakes in the second best Nifty50 performer in 2022 so far.
Data available with corporate database Capitaline suggests individuals holding up to Rs 2 lakh worth shares accounted for 11.46 per cent stake in ITC as of September 30. On the other hand, individuals holding over Rs 2 lakh shares accounted for 1.32 per cent stake in the company.
At Tuesday's market capitalisation of Rs 4,34,135.36 crore, the two investor categories held Rs 55,482 crore worth of ITC shares.
ITC commanded a market value of Rs 2,68,633.5 crore as of December 31, 2021. Retail investors (12.21 per cent stake) and HNIs (1.44 per cent stake) together held 13.65 per cent stake in the company then. Their combined stake was valued at Rs 36,668.47 crore in the FMCG major on December 31.
The scrip has more than doubled since October 2021 and is up 60 per cent in 2022 so far.
ITC has gained market share in cigarettes and that its other segments have also been scaling up with portfolio and network expansion. That augurs well for the Kolkata-based company, said analysts.
The near-term outlook remains positive for the cigarette maker, given a positive cigarette volume traction in a stable tax regime, a strong pricing and benefits of backward integration in paper and paper board business in the near term.
Besides, the company is seeing a structural recovery in its hotel business, analysts said.
With no price hikes in the near term, the government's action on curbing illicit cigarette will help ITC to maintain volume growth momentum in the cigarette business, analysts said.
"Strong growth in non-cigarette FMCG business, recovery in the hotel business and sustained strong growth in the PPP business will drive double-digit revenue and PAT growth over the next two years. The stock currently trades at 24 times and 20.9 times its FY2023E and FY2024 EPS, which is at a discount to some large consumer goods companies," said Sharekhan.
"Strong earnings visibility with improving growth prospects of core cigarette business and margin expansion in non-cigarette FMCG business, along with a high cash generation ability and strong dividend payout will reduce valuation gap in the coming years," it said while suggesting a target of Rs 402 on the stock.
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