FMCG major, ITC extended its 52-week high on Tuesday on the BSE before correcting in the closing hours of trading. ITC has also broken the record and has become Nifty topper. Not only this, the stock of ITC has reached a 3-year high on the stock exchanges. ITC made some strong gains in the volatile market scenario which was a spillover of macroeconomic risks. But ITC’s potential has just begun and is being seen as a classic value stock to grow.
on BSE, ITC Shares hit new 52-week high 293.45 earlier today. However, the stock corrected and closed in the red 286.75 each fell 1.73 per cent on the exchange.
The market cap of ITC at closing price is 3,53,369.36 crore.
Compared to its 52-week high, ITC’s stock is up more than 44% in one year. Meanwhile, its growth so far in 2022 is around 34%.
Compared to the closing price on BSE, ITC’s stock has gained about 41 per cent in one year and about 31 per cent so far this year.
ITC is close to the club of top 10 most valuable companies. It currently ranks 11th most valuable firm on BSE and is followed by Bharti Airtel Which is the tenth most valuable firm by market capitalization? 3,75,819.43 crore and HDFC with a valuation of 9th position 3,99,627.10 crores.
Talking about the stock performance of ITC, Dr VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services said, “Globally now the trend is in favor of value stocks. ITC, a classic value stock, is underperforming due to ESG concerns. Especially since tobacco is a major contributor to the bottom line of ITC. This poor performance, which had no fundamental basis, is now being corrected.”
Last month, analysts at Ventura Securities said in their research note that although ITC Ltd. has been a blatant underperformer over the years, we believe this is poised to change. After achieving significant scale, the FMCG business which is pulling off profitability is expected to witness strong growth (16 per cent CAGR to 16% CAGR). 22,729 crore) with margin improvement (up +290 bps to 8.6%). Post-pandemic migration towards sustainable packaging and Badla Yatra will help drive revenue growth and profitability of both the verticals. With the boom in tax collections, the stress on rising cigarette taxation has eased and this will help increase the volume of cigarettes. The agri-commodities business prospects have improved sharply after the Ukraine invasion and the IT vertical is expected to continue its strong double-digit revenue growth with top percentage margin.
Further, Ventura’s note said that among the Nifty 50 stocks, ITC is one of the few stocks that offer a strong growth opportunity with an attractive dividend yield of 4.19%. The market has not taken cognizance of the fact that FY24 EBIT of ITC 24,6135 crore is expected to be more than 1.6 times of HUL (which is the second most profitable listed consumer player) and equal to the combined EBIT of the next 4 players. It added, “We believe this dominance should result in a rerating of the stock as the growth story unfolds. Another kicker to the valuation rerating is the potential demerger plan as of December-21st Corporate Communications.” mentioned in.”
Ventura has a Buy rating on ITC with a target price of 350 onwards.
In its FY 2012 Annual Report, ITC’s Chairman and Managing Director, Sanjeev Puri said, with increased scale and margin expansion, FMCG businesses are expected to contribute more and more to the company’s profit pool, thereby further adding value. To set the stage for growth opportunities.
On the cigarette business, Puri said, “As seen earlier, the stagnation in taxes on cigarettes will enable the legal cigarette industry to recover the volumes lost in the illegal trade, thereby increasing the domestic demand for Indian tobacco, While the loss of tax revenue is also reduced to the exchequer due to illegal trade.” Stability in taxes is critical to address the interests of all stakeholders of this industry, including tobacco farmers, the exchequer and consumers, he added.
While relief from further increases in taxes has provided the legal cigarette industry with an opportunity to recover volumes lost in trafficking, the operating environment remains challenging due to high levels of taxation, a high share of trafficking, and disproportionate regulatory pressures. Yes, said Puri.
In FY22, the total gross revenue of ITC 59,101.09 crores up by 22.7%, while EBITDA grew by 22.0% 18,933.66 crores. profit after tax was 15,057.83 crore (previous year 13,031.68 crore). Total comprehensive income for the year was 15,631.68 crore (previous year 13,277.93 crore). Earnings per share for the year 12.22 (previous year 10.59).