Buy ITC Ltd., target Rs 273.0 : Bank of America Merrill Lynch

Bank of America Merrill Lynch has Buy call on ITC Ltd. with a target price of Rs 273.0. The current market price of ITC Ltd. is 249.85. Time period given by analyst is year, when ITC Ltd. price can reach defined target. BofA-ML maintains a buy rating on ITC post June quarter results with a 12-month target price of Rs 273. ITC Q1 profit was in-line with estimates. A 3.5 per cent volume growth in cigarettes was ahead of expectations. ITC recorded robust 10 per cent growth in FMCG segment despite weak demand environment. BofA-ML expects stronger 2H led by cigarette price increases and improvement in FMCG growth. Healthy volume growth lifts chance of price hikes in Gold Flake and Navy Cut which accounts for up to 40 per cent of the portfolio. Channel checks indicate that a potential 10 per cent price hike in coming months. The FMCG business led robust growth in Aashirvaad Atta, as well as Bingo range of snacks and biscuits.