ITC Shares: Should you buy, sell or hold after 3rd quarter results, dividend declaration?

The board of the company has approved the interim dividend of Rs 5.25 per ordinary share Rs 1 for the financial year ending March 31, 2022.

ITC saw encouraging improvement in cigarettes. The increase in sales was largely due to volumes, which were above pre-Covid levels. Cigarette margins rose 55 bps, leading to a 14% increase in EBIT. FMCG’s performance was driven by food items and discretionary categories. Margins were lower due to higher inflation, brokerage Emkay highlighted.

It has retained buy rating on ITC shares with a target price of 270. “Performance was better than other staples”. The recovery in cigarettes from stable taxation and low inflation may continue to improve the income outlook.”

Cigarette segment earned revenue of 6,958 crore as compared to 6,091 crore in the same period of the previous financial year. The revenue of its other FMCG division was 4,099 crore as against 3,752 crore in the year-ago quarter.

Analysts at Prabhudas Lilladher expect hotel profitability to improve steadily without further severe COVID-19 waves, though paper and paperboard margins have reached their peak. FMCG remains on track to maintain double-digit growth and steady margin expansion. The brokerage believes that FMCG and IT services will add maximum shareholder value over time. Its buy rating on ITC stock is . Comes with a target price of 284 per share.

“Volumes have increased as compared to pre-covid, margins in the business remain muted. While the stock is trading at a steep discount to its FMCG counterparts, we believe that the stock will remain under pressure due to stiff competition from smuggled cigarette brands and change in central duty. maintain sales with a target price of 230,” Dolat Capital said in a note.

The views and recommendations given above are those of individual analysts or broking companies and not of Mint.