Why ITC Shares Are Upbeat Today

ITC’s share price continued to make gains for the third straight session as analysts remained optimistic about the company’s future.

What Happened: CLSA maintained its “outperform” rating for the stock with a price target of ₹494. Jefferies also maintained its “buy” rating on the stock with a target price of ₹452. The company hosted its ITC Institutional Investors and Financial Analysts Day 2023 on Tuesday.

CLSA said that the company is directing its attention towards Fast-Moving Consumer Goods (FMCG) and related adjacencies, with a targeted annual increase of 80-100 basis points in EBITDA margin. The global brokerage said that in the near term, growth in the cigarette segment is expected to consolidate due to a high base. However, the medium-term outlook for the cigarette business remains positive with expectations of volume growth, provided taxation remains stable.

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To diversify revenue streams and explore higher-margin opportunities, the company is venturing into new areas, such as nicotine in the agri-business sector.

Talking about the FMCG segment, Jefferies said that rural demand has reached a bottom, and the Fast-Moving Consumer Goods (FMCG) business is well-positioned to capitalize on the anticipated upturn in demand. The research firm also added that the company’s management expresses optimism for a stable tax regime in the cigarettes segment.

Price Action: ITC’s share price was up 0.90% to trade at ₹457.20 as the markets opened on Wednesday.

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