ITC is catching the attention of investors as major brokerage houses express bullish sentiments, citing compelling reasons to buy into the company. As of the latest reports, Elara Securities, BNP Paribas, and Kotak have all weighed in on ITC, offering insights into its growth strategies and recent forays into new business segments.
Elara Securities Recommends Accumulation with a Target Price of INR 516:
Elara Securities suggests accumulating ITC shares, projecting a 14% upside with a target price of INR 516. The brokerage house highlights ITC’s non-cigarette business as a key driver, showcasing a remarkable 2.5x rise in revenue and a 3.2x increase in the bottom line over the past decade.
ITC’s three-fold growth framework, emphasizing core business reinforcement, emerging ventures, and exploration of potential growth avenues, has contributed to an increased Return on Capital Employed (ROCE) to 21.7% in FY23 from 14.3% in FY13.
BNP Paribas Maintains BUY Rating with a Target of Rs 515:
BNP Paribas maintains a “BUY” recommendation for ITC, setting a target price of Rs 515 per share. The report underscores the scaling up of ITC’s non-cigarette FMCG business, which now contributes 27% to overall revenues, up from 17% in FY2013. With a focus on the other FMCG businesses, including foods, beverages, and plant-based products, ITC aims to further enhance its EBITDA margins through improved product mix, premiumization, scale advantages, and cost optimization.
Kotak Securities reports ITC’s entry into dairy business can lead the growth:
Kotak reports a strategic move by ITC into the dairy business in Jharkhand, unveiling various products under its ‘Aashirvaad Svasti’ brand. The product range includes milk, curd, paneer, lassi, and ‘mishti doi’ (sweet curd). This expansion aligns with ITC’s broader strategy to diversify its product portfolio and tap into new consumer segments.
These positive outlooks from brokerage houses signal a growing confidence in ITC’s ability to capitalize on the vast potential within the non-cigarette FMCG sector. Investors are taking note of the company’s strategic initiatives, including the penetration into new markets, emphasis on branded conversion, and entry into the dairy segment.
As ITC continues to fortify its foothold in the FMCG landscape, market analysts anticipate a consistent scale-up in the contribution of its non-cigarette FMCG business in the coming years.