Brokerages bullish on ITC post Q1 results. Should you buy?

Shares of ITC traded lower in morning trade on Monday in a weak market despite having posted a 12.69 per cent rise in consolidated profit for June quarter at Rs 3,436.51 crore, driven mainly by FMCG and agri-business segments.

The company had reported Rs 3,049.38 crore profit for the same quarter of the previous financial year.

Brokerages retained their bullish stance on ITC post Q1 results. Jefferies maintained a ‘buy’ rating on the FMCG major with a price target of Rs 360.


According to HDFC Securities, ITC’s first quarter performance remained soft against its FY19 show but was in line with other FMCG peers. “We expect Q1 growth trajectory to replicate over FY20, led by a higher base of cigarette volume growth and consumption slowdown.”

The brokerage ‘maintained’ a ‘buy’ rating on ITC with a price target of Rs 362.

However, it de-rated the cigarette business by 10 per cent, owing to slower-than-expected volume growth in an era of stable taxes.

The shares of the company closed 1.91 per cent lower at Rs 259.55 on BSE.