Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us    
Google
Web www.equitybulls.com
Research

| More

Result Update: ITC Ltd - BUY - TP Rs.330 - Kotak

Posted On: 2018-07-29 21:51:35

ITC's EBITDA/ PAT growth was reasonably healthy at +19.2%/+18.2% YoY, well ahead of our and consensus estimates with significant improvement in performance in cigarettes/ other segments in the aggregate. Strong performance was exhibited by Cigarettes, Agri-business and Paper board. Despite strong performance, ITC is trading at a steep discount to other large FMCG players, which trades at 35x-45X FY20E PER (vs. 25X FY20E PER for ITC). We retain BUY on ITC with an unchanged price target of Rs 330 at 29x FY20E PER.

Key Highlights

- Revenue was reported at 107.07 bn (+6.5% YoY), a marginal 1% above expectations led by strong performance of Cigarettes, Agri-business and Paper board divisions

- Other operating income was also higher than expected at Rs 1.52 bn (+95% YoY)

- Aggregate EBITDA was reported at Rs 42.0 bn (+19.2% YoY) translating into a healthy EBIDTA margin of 39.2%. It's commendable that the company is able to sustain its operating margin at ~40% level post GST. The strong operational performance was on the back of good performance of cigarettes and paper board.

- Recurring PAT was reported at Rs 28.2 bn (+18.2%) by and ahead of our estimate. It was aided by strong operational performance.

Valuation & outlook

- Despite operating under an unfavorable regulatory environment, ITC has been consistently posting strong numbers and is one of the most attractive stocks available in the FMCG space with strong prospects. The adverse abrupt increase in indirect taxes on cigarettes in the past looks history, with we estimating a more stable and predictable GST policy on cigarettes. Non-cigarette (FMCG) segment have started to deliver and should do well in line with estimated improvement in consumer demand in rest of FY19.

- Despite strong performance, ITC is trading at a steep discount to other large FMCG players, which trade at 35x-45X FY20E PER (vs. 25X FY20E PER for ITC). We note that several much-more-expensive peers have performed equally well or poorly to ITC. We remain positive on ITC as the current valuations factor less than super-normal growth over FY18 to FY20E. We retain BUY on ITC with an unchanged price target of Rs 330 at 29x FY20E PER.

Shares of ITC LTD. was last trading in BSE at Rs.302.2 as compared to the previous close of Rs. 287.15. The total number of shares traded during the day was 3471858 in over 24427 trades.

The stock hit an intraday high of Rs. 307 and intraday low of 294.85. The net turnover during the day was Rs. 1047635660.


Source: Equity Bulls

Click here to send ur comments or to feedback@equitybulls.com


Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only. www.equitybulls.com, its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. www.equitybulls.com or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.





Other Headlines:

Auto Industry Volume Update: September 2018 - Kotak

Sector Update - Natural Gas - Kotak

Company Visit Note: Jindal Stainless Ltd - NOT RATED - Kotak

Company Update: Bajaj Electricals Ltd - ACCUMULATE - TP Rs.545 - Kotak

Telecom: 2QFY19 preview - no respite - Kotak

Sector Update: Natural Gas - Kotak

Company Update: NBCC (India) Ltd - BUY - TP Rs.95 - Kotak

Sector Update: Paper Industry - Kotak

Management Meet Update: Maharashtra Seamless Ltd - BUY - TP Rs.805 - Kotak

Mid-Year FY19 Bank Outlook: Stress in Non-Corporate Segments - India Ratings and Research

View on proposed banks merger

Company Update: GHCL - BUY - TP Rs.330 - Kotak

Company Update: MIRC Electronics Ltd - BUY - TP Rs.32 - Kotak

Company Visit Note: Finolex Industries Ltd - ACCUMULATE - TP Rs.671 - Kotak

Company Update: NMDC Ltd - BUY - TP Rs.125 - Kotak

Company Update: Allcargo Logistics Ltd - BUY - TP Rs.145 - Kotak

Company Update: Hindustan Zinc Ltd - ACCUMULATE - TP Rs.300

Buyback Offer: Larsen & Toubro Ltd - BUY - Buyback Price Rs.1500

Result Update: Vascon Engineers Ltd - BUY - TP Rs.48 - Kotak

Result Update: Voltamp Ltd - BUY - TP Rs.1320 - Kotak

Result Update: Bodal Chemicals Ltd - REDUCE - TP Rs.130 - Kotak

Result Update: MIRC Electronics Ltd - ACCUMULATE - TP Rs.32 - Kotak

Result Update: Shankara Building Products Ltd - BUY - TP Rs.2017 - Kotak

Result Update: Dilip Buildcon Ltd - BUY - TP Rs.1276 - Kotak

Result Update: Zensar Technologies Ltd - ACCUMULATE - TP Rs.1373 - Kotak

Result Update: The India Cements Ltd - REDUCE - TP Rs.112 - Kotak

Result Update: Nagarjuna Construction Co Ltd - BUY - TP Rs.151 - Kotak

Result Update: Berger Paints Ltd - SELL - TP Rs.305 - Kotak

Result Update: Allcargo Logistics Ltd - BUY - TP Rs.145 - Kotak

Result Update: Aksharchem (India) Ltd - REDUCE - TP Rs.533 - Kotak

Result Update: AIA Engineering Ltd - SELL - TP Rs.1700 - Kotak

Result Update: Cummins India Ltd - BUY - TP Rs.785 - Kotak

Result Update: Dollar Industries Ltd - BUY - TP Rs.427 - Kotak

Result Update: KNR Constructions Ltd - BUY - TP Rs.283 - Kotak

Result Update: Finolex Industries Ltd - ACCUMULATE - TP Rs.671 - Kotak

Result Update: MOIL Ltd - BUY - TP Rs.260 - Kotak

Result Update: VRL Logistics Ltd - BUY - TP Rs.395 - Kotak

Result Update: Voltas Ltd - ACCUMULATE - TP Rs.658 - Kotak

Result Update: Va Tech Wabag Ltd - BUY - TP Rs.476 - Kotak

Result Update: Mahindra Holiday Resorts India Ltd - BUY - TP Rs.390 - Kotak

Result Update: Sterling Tools Ltd - ACCUMULATE - TP Rs.418 - Kotak

Result Update: MRPL - BUY - TP Rs.106 - Kotak

Result Update: Indraprastha Gas Ltd - SELL - TP Rs.257 - Kotak

Result Update: Engineers India Ltd - BUY - TP Rs.187 - Kotak

Initiating Coverage: Amber Enterprises - BUY - TP Rs.1145 - Kotak

Karia Can Company Ltd Q1FY19 net profit slips to Rs. 1.88 crore

Result Update: Bajaj Electricals Ltd - SELL - TP Rs.545 - Kotak

Result Update: Gabriel India Ltd - BUY - TP Rs.185 - Kotak

Result Update: Blue Star Ltd - ACCUMULATE - TP Rs.743 - Kotak

Result Update: The Phoenix Mills Ltd - ACCUMULATE - TP Rs.707 - Kotak







Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2018