Tobacco Products
Cigarettes & Tobacco Products
from 281 today
ITC reported a cigarette EBIT miss with near-term volatility expected to continue as the pass-through of tax hikes remains in progress. Earnings pressure on cigarettes offsets the benefits of recovery in FMCG and Paper, leading us to maintain our Neutral rating with an SoTP-based target price of INR300.
In Q1FY27, cigarette volumes declined ~5% YoY, better than expected, supported by product innovations and calibrated pricing. Looking ahead, ITC's earnings trajectory will likely hinge on growth across FMCG and Paperboards, and we maintain our ADD rating.
The stock is trading at 19x/17x FY27E/28E EPS and has a dividend yield of ~5%, which restricts the downside; maintain ADD with a TP of INR 320.
Ratings and target prices as published by each firm. Each summary condenses that firm's stated view in its own note and is attributed to it; no report text is reproduced.
