FMCG giant ITC Ltd is a smoking hot stock to buy in the Diwali 2024 season. The highest target price set on ITC is Rs 594 for the entire Samvat 2081 period, which signals approximately 22% potential upside in 12 months. ITC share price has turnaround in a span of six months, with gains of over 12%. However, the stock corrected to around Rs 480 levels from its all-time high of Rs 528.55 apiece. Hence, there is a buying opportunity for fresh gains in ITC.
ITC Share Price:
After market hours of October 29, ITC share price ended at Rs 487.95 apiece on BSE, up by 0.80% with a market cap of Rs 6,10,410.44 crore. The stock’s 52-week high and low is at Rs 528.55 apiece and Rs 399.30 apiece respectively.
The price-to-equity ratio in ITC is at 29.64x, while the return on equity is at 28.22% which is strong. YTD, the stock zoomed by 4.4% so far. All-time gains in ITC are massive by 9,003.54%.
Since its listing, ITC has rewarded investors with bonus issues, stock splits and dividends over the years since its listing.
Dividends: The FMCG giant has delivered up to 29 dividends since July 2001, as per Trendlyne data. In the last 12 months, the dividend payout is Rs 13.75 per share. While its dividend yield is of 2.63%.
Bonus Issues: The company has a strong track record of bonus shares. The last bonus was of 1:2 ratio in July 2016, while ITC delivered 1:1 and 1:2 bonus ratios in August 2010 and September 2005. ITC has overall delivered 3 bonus shares.
Stock Split: Further, ITC has carried a single stock split so far. In September 2005, ITC’s shares split from Rs 10 face value to Rs 1 each, hence a ratio of 1:10.
In Q2FY25, ITC performed resiliently during the quarter. Gross Revenue stood at Rs. 20,360 crores representing a robust growth of 16.0% YoY. PBT (before exceptional items) and PAT stood at Rs. 6,755 crores and Rs. 5,078 crores respectively. Earnings Per Share for the quarter stood at Rs. 4.06.
BUY ITC Shares This Diwali:
Way2Wealth On ITC Stock:
ITC Ltd is currently in the process of demerging its hotels business, and board has approved consolidation of its shareholding in rival hospitality chains Oberoi and Leela by acquiring shares from a wholly-owned arm, Russell Credit Ltd. The board approved the acquisition of 1.52 crore equity shares of Rs 2 each of EIH Ltd (EIH) and 34.60 lakh equity shares of 2 each of HLV Ltd (HLV), from Russell Credit Ltd (RCL), a wholly-owned subsidiary of the company, at their respective book value.
Expectations of a good crop output, anticipated moderation in inflation, improving agri terms of trade, and the Government’s thrust on public infrastructure & the rural sector augur well for a pick-up in consumption demand.
“We remain positive on ITC’s performance and investors should use the recent correction as an opportunity to buy the stock for the long term,” the brokerage’s note said. Hence, it recommended BUY for target price of Rs 530.
Religare Broking On ITC:
ITC Limited stands as a diversified leader in India, excelling in cigarettes, FMCG, hotels, agri-business, and paperboards. Its ITC Next strategy drives future growth through innovation, agile supply chains, and sustainability initiatives. By launching new products across various categories and enhancing distribution, ITC is fortifying its core businesses.
With a strong portfolio of brands and an extensive market presence, ITC mitigates risks through diversification while leveraging brand equity to capture market share, ensuring sustained revenue and reinforcing its leadership position.
“On the financial front, we have estimated its revenue/EBITDA/PAT to grow at 12.7%/13.5%/13.8% CAGR over FY24-26E. Thus, maintaining our Buy rating and a target price of Rs 594,” Religare’s note said.
ITC Limited is a diversified conglomerate with a presence in multiple portfolios of businesses, including cigarettes, FMCG, hotels, agri-business, and paperboards and packaging. The company holds a dominant position in the Indian cigarette market, contributing significantly to its revenue. ITC has also expanded into various FMCG sectors, offering products like packaged foods, personal care items, and stationery.
Story first published: Wednesday, October 30, 2024, 2:42 [IST]
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