ITC Ltd
Stock Snapshot
Price Performance
Vista Outlook
View Technicals Analysis →Basis of our Recommendation
ITC Ltd's recent performance reflects a complex interplay of challenges and opportunities. Management has highlighted a cautious outlook, particularly in the cigarette segment, which has faced significant volume declines due to increased excise duties and competition from illicit products. However, the FMCG segment has shown resilience, with a 12.2% YoY revenue increase, driven by strong demand in premium categories. This diversification is crucial as ITC navigates near-term pressures, including geopolitical tensions affecting its agri business and rising input costs. Vista's financial outlook anticipates revenue contraction and margin pressure, aligning with management's cautious tone. Despite these challenges, ITC's strategic focus on expanding its FMCG portfolio and leveraging digital platforms positions it for potential long-term growth. The industry context supports this outlook, with improving pricing power and a stable economic environment, although external factors like inflation and regulatory changes remain watchpoints. Over the next 12-24 months, key opportunities include the expansion of the FMCG segment and digital initiatives, while headwinds may arise from regulatory pressures and geopolitical uncertainties
Why We Like This Stock
- Strong performance in the FMCG segment, particularly in premium categories, indicates resilience and growth potential
- Strategic initiatives in digital transformation and capacity expansion are expected to enhance operational efficiency and market reach
- Management's focus on sustainability and resource efficiency aligns with long-term consumer trends and regulatory expectations
Things To Watch Out For
- Significant volume declines in the cigarette segment due to increased excise duties and competition from illicit products pose risks to revenue
- Geopolitical tensions and inflationary pressures are impacting input costs and demand in the agri business, creating uncertainty
- Regulatory changes and potential shifts in consumer behavior could further complicate the operational landscape
Key Parameters
Financial Snapshot
| Actuals | Forecast | ||||
|---|---|---|---|---|---|
| FY24 | FY25 | FY26 | FY27 | FY28 | |
| Revenue (Cr.) | 67,932 | 75,323 | 78,868 | 74,372 | 78,257 |
| Profit Before Tax (Cr.) | 26,338 | 26,788 | 28,325 | 22,012 | 24,752 |
| PBT Margin | 38.8% | 35.6% | 3591.4% | 29.6% | 31.6% |
| Net Profit (Cr.) | 20,366 | 20,301 | 21,839 | 16,982 | 18,808 |
| Earnings Per Share | 16.0 | 16.0 | 17.2 | 13.3 | 15.0 |
Analyst Recommendations
| Broker | Recommendation | Target Price | Date |
|---|---|---|---|
| Axis Securities | ► Hold | 325 | 22-May-2026 |
| BOB Capital Markets | ▲ Buy | 355 | 22-May-2026 |
| CLSA | ▲ Outperform | 388 | 03-Aug-2026 |
| Citigroup | ▼ Sell | 290 | 22-May-2026 |
| Elara Capital | ► Accumulate | 335 | 22-May-2026 |
| Goldman Sachs | ► Neutral | 290 | 03-Aug-2026 |
| HDFC Securities | ▲ Buy | 356 | 05-May-2026 |
| HSBC | ► Hold | 320 | 03-Aug-2026 |
| ICICI Securities | ► Hold | 350 | 22-May-2026 |
| JPMorgan | ► Neutral | 310 | 03-Aug-2026 |
| Jeffries | ▲ Buy | 350 | 03-Aug-2026 |
| Kotak Securities | ▲ Buy | 360 | 03-Aug-2026 |
| Macguire | ► Neutral | 300 | 03-Aug-2026 |
| Moneycontrol | ▲ Overweight | nan | 03-Aug-2026 |
| Morgan Stanley | ► Equalweight | 346 | 22-May-2026 |
| Motilal Oswal | ► Neutral | 300 | 03-Aug-2026 |
| Nomura | ▲ Buy | 340 | 03-Aug-2026 |
| Prabhudas Liladhar | ► Hold | 291 | 03-Aug-2026 |
Company Overview
Show Company Profile
ITC Limited engages in the fast-moving consumer goods, paperboards, paper and packaging, and agri businesses in India and internationally. The company offers cigarettes and cigars; foods, including staples, spices, biscuits, confectionery and gums, snacks, noodles and pasta, beverages, dairy products, ready-to-eat meals, chocolates, coffee, and frozen foods; personal care products; education and stationery, such as balls, gels and roller pens, mechanical pencils, geometry boxes, erasers, sharpeners and rulers, wax crayons, plastic crayons, and sketch pens and oil pastels; safety matches; and agarbattis and dhoops under various brands, as well as operates a hotel under the ITC Grand Central name in Mumbai. It also provides virgin, recycled, coated barrier, cupstock base, liner, liquid packaging, antifungal, solid, and graphic boards, as well as specialty papers; surfacing, print base, barrier, overlay, and liner papers; plastic substitution products; and packaging products, including cartons, flexible, tobacco, and green packaging products. In addition, the company exports feed ingredients, food grains, marine products, processed fruits, coffee products, leaf tobacco products, and spices; and offers information technology services for the banking and financial services, healthcare, manufacturing, consumer goods, travel, and hospitality industries, as well as produces and commercializes seed potato technology products. Further, it provides property infrastructure maintenance; engineering, procurement and construction management and project management consultancy services; business consulting; and agro-forestry and other related services, as well as engages in the fabrication and assembly of machinery for tube filling, cartoning, wrapping, and conveyor solutions and engineering activities. ITC Limited was incorporated in 1910 and is headquartered in Kolkata, India.