ITC shares rose 1.4 percent at Rs 267.10 on BSE in Thursday’s trading after domestic brokerage firm Motilal Oswal Financial Services (MOSL) raised its rating on the stock to ‘Buy’ and a target price of Rs 335 per share. According to Motilal Oswal, a better-than-expected recovery in demand, healthy margin prospects for cigarettes, sales momentum in the FMCG business, lower drag in hotel operations and better capital allocation in recent years have led to the upgrade.
“A stable tax environment for cigarettes in recent years has enabled ITC to calibrate price increases to avoid a demand distortion. We expect this trend to continue and should result in improved cigarette volumes and earnings visibility in the medium term. The breadth of ITC’s FMCG product portfolio gives it an advantage in a rapidly changing demand environment. Its leadership position in some categories gives it its pricing power to offset increasing input cost pressures in other categories, where pricing power is not as strong,” the company said.
ITC Stock Price History
In calendar year 2022 (CY22), ITC has so far outperformed the market, having underperformed for the past three consecutive calendar years. In CY21, ITC had gained 4 percent, against a 22 percent rally in the S&P BSE Sensex. In CY19 and CY20, the stock was down 16 percent and 12 percent, respectively, compared to an increase of 14 percent and 16 percent, respectively, in the benchmark index. So far in CY22, ITC has outperformed the market with a 23 percent increase, compared to a 9 percent drop in the S&P BSE Sensex. In addition, the share has risen 28 percent in one year, against a 1 percent increase in the benchmark index.
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