(Rating: BUY, TP: Rs283, Upside: 33.9%)
- View - We build in 8%/10%/9% revenue/EBITDA/PAT CAGR for the company over FY21-24E. We reiterate our BUY rating and a TP of Rs 283 based on 20x FY24E earnings, a significant discount of 50-60% to sector peers and a 15% discount to its own long-term average multiple.
- Result summary - Revenue growth of 37% YoY led by cigarettes/paperboards and steady performance from FMCG and Agri business. EBITDA margin contracted by 90bps QoQ however improved by 300bps YoY due to operating leverage. The margin is still below pre-Covid levels owing to inflation in input cost. Subdued margin together with lower other income resulted from lower market yields translated into PAT growth of 29% on 26% decline in base quarter.
- Segmental performance - Cigarettes saw 32.9% revenue and 36.7% EBIT growth, FMCG saw 10.4% revenue and 38.3% EBIT growth, hotels saw 5.6x jump in revenue on Covid-led washout in base quarter and loss of Rs 1515mn at EBIT level, agribusiness saw 9.2% revenue and 9.5% EBIT growth and paper saw 54.2% revenue growth with massive 145% EBIT growth due to operating efficiency
Shares of ITC LTD. was last trading in BSE at Rs. 208.65 as compared to the previous close of Rs. 211.1. The total number of shares traded during the day was 927813 in over 8524 trades.
The stock hit an intraday high of Rs. 213 and intraday low of 208. The net turnover during the day was Rs. 195036983.