ITC Hits Fresh 52-Wk High, Races Past Bears; Brokerages Remain Bullish

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ITC Hits Fresh 52-Wk High, Races Past Bears; Brokerages Remain Bullish
Credit: © Reuters.

By Malvika Gurung

Investing.com -- Shares of the cigarettes-to-FMCG conglomerate ITC Ltd (NS: ITC ) defied the market mood on Thursday, surging 4.12% higher to Rs 277.8 apiece at 9:43 am, while benchmark equity indices Nifty 50 and Sensex were trading 2% and 1.96% lower, respectively.

The blue-chip stock recorded a 52-week high of Rs 279.25/share in early trade, and hit a 3-year high.

The heavyweight stock zoomed after posting revenue growth of 16% YoY at Rs 16,426 crore for the quarter ending March 2022, while its net profit rose 11.8% YoY to Rs 4190.96 crore, led by strong gains witnessed across all business segments despite the third wave of the pandemic.

Analysts from several brokerages are bullish on the stock. 

Jefferies has a buy rating on ITC, and a target price set at Rs 305/share, an upside of almost 10%. The company’s margins have expanded in Q4, thanks to gains in cigarettes and FMCG businesses, while an improvement in dividend pay-out drives up RoE to a 7-year high of 25%, it added.

Morgan Stanley (NYSE: MS ) has upgraded its target price on ITC to Rs 293/share, maintaining an Overweight call, as the earnings were at par with the brokerage’s estimates, while ‘strong results and negative near-term earnings drivers augurs well for ITC's stock performance’, stated MS, as cited by CNBC TV-18.

Further, Prabhudas Lilladher maintains a positive near-term outlook on the stock, given cigarette volume traction remains positive, considering the stable tax regime, and it benefits from the supply chain disruption in leaf tobacco and strong wheat exports, among other factors.

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