ITC Stock Strategy: Leading FMCG company ITC shares are seen falling on Friday 12 February. Today the company’s shares have weakened by 4 per cent and it is trading at a price of Rs 217. On Thursday, the stock closed at Rs 226 on the results. Overall, ITC’s profit in the December quarter declined by 11 per cent. At the same time, margins have also decreased and cigarette volumes have been declining. Which has affected the sentiment of investors. After the quarterly results, brokerage houses are also giving their opinion about the stock. Know whether you should invest or sell in ITC.
Cigarette sales weak
ITC’s Cigarette Sales / EBIT declined 8 per cent year-on-year in the third quarter. PBT has been reduced by 6 per cent to Rs 4850 crore. The company’s EBITDA declined 7.2 per cent year-on-year to Rs 4,281.3 crore in the third quarter. While the EBITDA margin stood at 36.3 per cent as compared to 39.1 per cent in the third quarter of last year.
Profit was weak
The company’s profit has fallen by about 11 per cent to about Rs 3660 crore. The company’s revenue in the third quarter also fell by 0.2 per cent to Rs 11,787.4 crore. The company has announced an interim dividend of Rs 5 per share to the investors.
What is your opinion on investment?
Brokerage House MK Global The company has given a target of Rs 265, recommending the purchase of ITC shares. The brokerage house says that the recovery in the cigarette business is going on and on a monthly basis, the December quarter has been better. Cigarette sales / EBIT growth outlook has improved due to reopening and stable tax. The company has a portfolio extension plan, which is a positive sign. FMCG results also showed better performance than anticipated.
There itself Brokerage House Motilal Oswal Has given a neutral rating in the stock and has set a new target of Rs 220 for it. It is expected to decline according to the current price. The brokerage house says that there has been pressure on the profitability and margin of the company, which is only according to estimates. Although recovery in the cigarette business is expected. FMCG business is also better. However, there may be some pressure on growth in the near term.
Brokerage House Credit Suisse Has given an outperform rating on ITC and has fixed the target at Rs 265. while Brokerage house CITI Has given a neutral rating on ITC and has set a target of Rs 215 for this.