ITC, Titan, HUL, Britannia, Jubilant Food: Share price targets by BofA Securities

Foreign brokerage BofA Securities has come out with a report on consumer sector, where it noted that changes in consensus expectations post the March quarter earnings season were modest. It noted that there were upgrades in food and beverages (F&B) and paints & adhesives segments post Q4 earnings. Cuts for discretionary sub-sectors have been modest overall particularly on revenues, it said. The brokerage believes volatility is here to stay, as it remained selective on stocks, given the prevailing valuations. It prefers Titan Company and Jubilant FoodWorks in the discretionary segment and ITC, Britannia Industries and Hindustan Unilever (HUL) in staples

ITC | Share price target Rs 500

BofA Securities used a sum-of-the-parts (SoTP) based valuation methodology for ITC to arrive at a target of Rs 500. It ascribed a 17 times multiple on FY25E Ebitda for cigarettes, reflecting the company's solid market positioning and current business outlook.

"Other FMCG business is valued at 5 times FY25 revenues benchmarked to the Indian F&B universe. We apply 8 times, 17 times and 35 times multiples on FY25E EBITDA for the agricultural, paperboard  and packaging and hotels businesses, respectively. We value ITC Infotech on 17 times FY25E earnings. Overall, at target, the implied multiple is 27 timres FY25E P/E,' it said.

This is at about a 35 per cent premium to the stock's average 1-year forward PE multiple over the last five years, which BofA Securities thinks is warranted given the cigarette volumes, taxation, pricing and earning trends currently and overall business momentum versus peers and other parts of the market.

Titan Company | Share price target

BofA Securities  has a target of Rs 3,200 for Titan Company based on the Tata group firm's standalone business being valued at 58 times FY25E EPS, which is similar to the relative premium vis-à-vis broader Indian market seen over the last 5 years.

"Additionally, we add Rs 160 per share to our target for CaratLane at 5 times sales. Titan's execution track record has been good and we see continued opportunity for market share gains. Like most prominent consumer businesses in India, absolute valuations remain high, given the solid positioning and long-term growth prospects," BofA Securities said.

Hindustan Unilever (HUL) | Share price target Rs 3,000

BofA Securities has a target of Rs 3,000 based on 55 times FY25E earnings, valuing the company in-line with its average forward trading multiple over the last 5 years. It believes the multiple is warranted given the reasonably steady growth rates expected and improving competitive positioning.

Britannia Industries | Share price target Rs 5,540

BofA Securities said its target of Rs 5,540 on Britannia Industries is based on 54 times FY25E EPS. The high absolute valuations are warranted given the long term growth opportunity, particularly in the packaged F&B space, it said.

"Our multiple is at a 10-15 per cent premium to stock's 5-year average forward trading multiple, warranted in our view given the business outlook, competitive position, execution history and possible likely upsides from portfolio diversification," it said.

Jubilant FoodWorks | Share price target Rs 555

BofA Securities has a target of Rs 555 on Jubilant FoodWorks based on core standalone business (Domino's India++) valued at Rs 537 per share using a discounted cash flow (DCF) methodology on March 2025 basis. It also include the balance from overseas subsidiaries and key investments (Domino's Sri Lanka/Bangladesh valued at 5 times FY25 sales and DP Eurasia/BBQ-Nation valued at market price with 20 per cent holdco discount).

BofA Securities implied multiple for the standalone Jubilant business works out to 52 times FY25E PE, which it believes is justified given the strong growth headroom for the business over the medium-to-long term.

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