ITC shares saw a nearly 3 per cent decline after posting a 7.27 per cent drop in consolidated net profit to ₹5,013.16 crore for the December quarter of 2024. Despite this, the revenue from operations increased by 9.05 per cent to ₹20,349.96 crore for the same quarter.
Most brokerages have reiterated their stance on the stock, focusing on cigarette volume growth but lowering target prices and EPS estimates due to weak margins, subdued FMCG performance, and the demerger of the hotel business.
Global brokerages JP Morgan and Morgan Stanley have maintained overweight ratings on the stock with target prices of ₹505 and ₹578, respectively. They noted the surprise in cigarette volume growth, in-line revenue, and slightly soft margins.
Nuvama Institutional Equities, while cautious in the near term due to the urban slowdown and inflation in key raw materials, has retained a buy rating with a target price of ₹571, stating that the Q3 results were in line with estimates.
Motilal Oswal analysts reiterated a buy rating with a target price of ₹550 but slashed EPS estimates for FY25 and FY26 by 4 per cent and 5 per cent, respectively, citing the impact of the hotel business demerger and rising commodity prices affecting FMCG performance.
JM Financial highlighted that the demerger should reduce capex intensity and improve return on invested capital (ROIC). Despite reducing the target price from ₹550 to ₹515, the brokerage has maintained a buy rating.
Elara Capital pointed out that EBIT growth in cigarettes and FMCG was impacted by higher input costs, partially offset by agri businesses. The brokerage remains positive on ITC’s steady growth amid subdued demand, reiterating an accumulate call with a reduced target price of ₹487.
By midday, the stock had declined by 2.01 per cent to trade at ₹432.25 on the NSE, ranking among the top losers in the Nifty 50 pack. Analysts believe the company’s acquisition of Prasuma will help it become a full-stack player in the frozen food segment.
