ITC - Making Right Moves For Sustainable Growth: Prabhudas Lilladher

Prabhudas Lilladher Report

ITC Ltd.’s Investor meet highlighted growth imperative led by broad based growth across business segments enabled by- Innovation, efficient and agile supply chain, digital/ smart ecosystem and cost optimisation.

ITC continues to innovate and improve go-to-market initiatives even as cigarette business growth seems to be a function of taxation policy.

ITC is aiming for 80-100 basis points margin expansion in new fmcg business led by premiumisation, scale and cost optimisation. Hotels business is in for strong growth with huge scope to grow and rising average room rate/occupancy.

We found food tech and Nicotine derivative exports as two exciting businesses with a scope to create strong moats in long term. We continue to believe that fmcg and IT services will create huge value for shareholders over the years.

We remain positive innovation and digitization led strategy with sustained growth and 100% jump in return on capital employed of non-cigarette businesses and overall Rs 947 billion cash generation in last 10 years.

ITC trades at 24.9/22.9 times FY25/FY26 earnings per share with ~3% dividend yield and 9.7% EPS CAGR over FY23-26.

Maintain 'Accumulate' with SOTP based target price of Rs 492.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.