ITC shares were muted on Friday after the firm's Q1 net profit failed to meet investors' expectations but revenue surpassed estimates.

What Happened: The fast-moving consumer goods (FMCG) major saw its first-quarter standalone net profit rise marginally by 0.3% to ₹4,917.45 crore from the same period a year ago. Revenue improved 7.4% to ₹17,000 crore.

The company's revenue was propped up by its cigarettes business, which clocked in a revenue of ₹7918.10 crore, 6% higher year on year, as analysts had forecast.

Brokerage Views: HDFC Securities has a "reduce" rating on the stock with a target price of ₹400. The results were below its estimates as non-FMCG business disappointed on all fronts, the brokerage said.

Cigarettes performed better than expected, but analysts see its future volume growth at risk due to various factors including increasing competition.

Nirmal Bang downgraded the stock to "accumulate" with a target price of ₹540. The results were largely in line with its expectations except for its agribusiness, which surpassed estimates. The brokerage maintained its earnings forecasts for FY25 and FY26.

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Systematix also said that the results were in line with its forecast. Revenue was propelled by strong growth in the agri, hotels and cigarette businesses. It had a "hold" recommendation for ITC with a price target of ₹495. 

Cigarette sales will grow with new products and stable taxes, while FMCG and hotels will see gains from distribution and seasonal boosts, the brokerage said. The paper sector may struggle with margins, while agri revenues will rise from exports and value-added products, the research firm added.

Nuvama Institutional Equities reiterated that the results were in line with their expectation but net profit and EBITDA missed its estimates. The brokerage has increased ITC's cigarette business target multiple to 24x. Nuvama has a "buy" call on the stock and has increased the target price to ₹580.

ICICI Securities issued an "add" recommendation on the stock and raised the target price to ₹530. The company demonstrated strong performance with improving cigarette volume growth. Other businesses also showed resilience, it added. ICICI has increased its earnings estimates for FY26 and FY26 by 1% and 2%, respectively.

Price Action: Shares of ITC were trading 0.05% higher at ₹493.95 on Friday.

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