Brokerages raise price targets of ITC

Mumbai: Several brokerages have raised target prices on ITC after the September quarter results but see stricter norms for curbing tobacco consumption as an overhang. Shares of ITC sank 5.5% to ₹225.2 on Thursday.

"ITC at current valuations makes a compelling recovery and optionality play; however, the government re-looking at the taxation policy in tobacco has created an overhang that may keep the stock range-bound in the near term," said Investec, retaining a buy rating and revising target price to ₹258 from ₹254.

Emkay Global also maintained a buy rating with a target price of ₹270. Kotak Institutional Equities, while retaining a buy and raising the target price to ₹282 from ₹275, said ITC offers a combination of decent growth, dividend yield and inexpensive valuation. Antique Stock Broking and Axis Capital have also maintained buy and Credit Suisse have retained an outperform rating.

Motilal Oswal has retained neutral stance.

Edelweiss said the decision on tobacco tax remains a key variable. "While the cigarette opportunity in India remains attractive given per capita consumption, investing modalities have changed with ESG assuming a significant role. The decision of the panel on tobacco tax and the upcoming union budget are key variables," said Edelweiss.