ITC shares fell in early trading on Friday after the company’s Q1 results missed Street estimates. The stock dropped as much as 2.29% to Rs 482.40 per share on the BSE.
ITC, the hotels-to-cigarette conglomerate, reported a standalone net profit of Rs 4,917 crore for the first quarter of FY25, a marginal increase of 0.3% from Rs 4,903 crore in the same quarter last year.
The company’s revenue from operations rose 7.2% year-on-year to Rs 18,219.74 crore, up from Rs 16,995.49 crore. The cigarettes segment saw a 7% increase in revenue to Rs 7,918.10 crore, driven by a 2.7% growth in cigarette volumes.
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Brokerages on ITC
CLSA on ITC
According to a report by CLSA on ITC, the firm has maintained an “Outperform” rating and raised the target price to Rs 524. The report noted that ITC’s sales were 3% ahead of estimates, and EBITDA was also slightly ahead.
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The cigarette segment’s net revenue increased by 7% year-on-year, despite a slight dip in margins due to higher leaf tobacco costs. The FMCG-others segment experienced a 10.4% growth in PBIT, with a 6.3% year-on-year growth in segment revenue.
Jefferies on ITC
Jefferies has maintained a “BUY” rating on ITC with a target price of Rs 585. The report notes that cigarette business volume growth of 3% was in line with expectations. The visibility provided by stable taxation suggests continued momentum in the coming quarters.
However, the other segments disappointed in terms of revenue and margins. Despite current environmental and impact challenges, the report anticipates improvements across most of ITC’s business segments moving forward.
JP Morgan on ITC
JP Morgan has maintained its “OVERWEIGHT” rating on ITC with a target price of Rs 535. The report indicates that ITC’s Q1FY25 performance was in line with expectations, with a focus on cigarette performance.
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While revenue growth was affected by raw material inflation, which impacted margins, other FMCG segments showed an upward trend in margins. Non-FMCG segments, such as hotels, performed well, while the paperboard segment remained muted.
Morgan Stanley on ITC
Morgan Stanley has maintained an “OVERWEIGHT” rating on ITC and raised its target price to Rs 546. The report highlights that both revenue and margins exceeded estimates, with revenue beats in the hotels and agriculture segments, while cigarette and FMCG segments performed in line with expectations. Margin outperformance was driven by the cigarette and FMCG businesses.
Stock Performance in Last One Year
ITC shares have delivered positive returns across various time frames. Over the last month, the stock has shown a positive return of 15.35%, indicating short-term growth. In the last six months, the performance has been even more impressive, with a substantial increase of 11.44%, showcasing the stock’s resilience and upward momentum.
Year-to-date, ITC shares have surged by 4.75%, emphasizing the stock’s positive trajectory in the current calendar year. Looking back over the last twelve months, the stock has demonstrated significant growth, surpassing 6.51%. These consistent positive returns underscore the stock’s strong performance and appeal to investors.
