Buy ITC Ltd., target Rs 320.0 : UBS

UBS has Buy call on ITC Ltd. with a target price of Rs 320.0. The current market price of ITC Ltd. is 261.45. Time period given by analyst is year, when ITC Ltd. price can reach defined target. The global investment bank expects cigarette volume growth to drive stock re-rating. UBS believes that cigarette volume remains a key driver of share price, as there is medium-term earnings visibility. The consumer affordability has improved in FY17. The global investment bank forecasts 3-4 per cent cigarette volume growth, and 150-200bp EBIT margin expansion.