ITC’s share price was volatile on Friday morning after the company posted its March quarter earnings on Thursday but most brokerages remain bullish on the stock.

What Happened: ITC reported a standalone net profit of ₹5,020.20 crore for the March 2024 quarter, a 1.3% decrease from ₹5,086.86 crore in the same period last year. The number was below analyst estimates of around ₹5,130 crore. The company’s revenue for the quarter was ₹16,579 crore, reflecting a 1.40% year-on-year increase and slightly above the estimated ₹16,250 crore. EBITDA for the quarter stood at ₹6,162.6 crore, marking a 0.8% decline, with the EBITDA margin falling by 70 basis points year-on-year to 37.2%.

Analyst Reactions: Investec maintained its “buy” rating for the stock with a target price of ₹504. The target indicates an around 12% upside from the stock’s closing price of ₹441.35. The brokerage said that earnings growth should improve in the coming quarters.

Goldman Sachs also maintained its “buy” rating for the stock with a target price of ₹480. The brokerage said that the company’s performance during the quarter was marginally below its estimates. The brokerage said that while the cigarette business is showing a strong recovery the weakness in the paper business continues.

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Citi also maintained its “buy” rating for the stock with a price target of ₹515. The global brokerage firm also said that the company’s March quarter numbers were below estimates. The analysts said that the cigarette business’s EBIT margins have near-term headwinds and a key thing to monitor would be taxation or any adverse regulatory decisions in the post-election budget.

Morgan Stanley maintained its “overweight” rating for the stock with a price target of ₹506. The brokerage said that the FMCG giant’s revenue for the quarter was in line with its estimates and profit beat its estimates.

Motilal Oswal also maintained its “buy” rating for the stock with a price target of ₹515. The brokerage said that the tobacco giant’s cigarette and FMCG business segments’ performance was healthy but non-consumer business segments agri and paperboard remained weak.

Emkay Global also maintained its “buy” rating for the stock cutting the target price to ₹510 from ₹520. The brokerage said that it stays positive on the stock “on the back of better execution and macros supporting its diversified businesses.”

Jefferies, on the other hand, maintained its “hold” rating for the stock with a price target of ₹435. The research firm said that the volumes in the cigarette business were a positive surprise but pressure in the agri and paperboard business led to an earnings miss. Cigarette sales volume grew 2% year-on-year during the March quarter.

Price Action: ITC’s share price was up 0.023% to trade at ₹441.45 as the markets opened on Friday.

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