Buy ITC, target price Rs 440: JM Financial

JM Financial has buy call on ITC with a target price of Rs 440. The current market price of ITC is Rs 378.Time period given by analyst is 12 months when ITC price can reach defined target.

ITC, incorporated in the year 1910, is a Large Cap company (having a market cap of Rs 472908.97 Crore) operating in Tobacco sector.

ITC key Products/Revenue Segments include Packaged Food Item, Agricultural Products, Paper & Paper Boards, Others, Tobacco Unmanufactured, Service (Hotel), Printed Materials, Other Operating Revenue for the year ending 31-Mar-2022.


Financials
For the quarter ended 30-09-2022, the company has reported a Consolidated Total Income of Rs 19062.68 Crore, up 1.34 % from last quarter Total Income of Rs 18810.18 Crore and up 24.49 % from last year same quarter Total Income of Rs 15313.15 Crore. Company has reported net profit after tax of Rs 4670.32 Crore in latest quarter.

The company’s top management includes Mr.Sanjiv Puri, Mr.Shyamal Mukherjee, Mr.Mukesh Gupta, Mr.Navneet Doda, Mr.Sunil Panray, Mr.Hemant Bhargava, Ms.Nirupama Rao, Ms.Meera Shankar, Mr.Arun Duggal, Mr.Shilabhadra Banerjee, Mr.David Robert Simpson, Mr.Ajit Kumar Seth, Mr.Anand Nayak, Mr.Sumant Bhargavan, Mr.Nakul Anand, Mr.Supratim Dutta. Company has S R B C & Co. LLP as its auditors. As on 31-12-2022, the company has a total of 1,241 Crore shares outstanding.

Investment Rationale
After the Union Budget 2023 imposed a total tax-hike of just about 2.5%(as per our workings) on the legal cigarettes industry, the brokerage is encouraged as it is now quite evident that the government is able to better-appreciate the legal industry’s logic that a punitive taxation regime on legal cigarettes alone does not necessarily help control the use of tobacco in the country, but instead causes migration out of tax-paid cigarettes into illegal channels. This should evidently drive a further re-rating of the ITC stock, the brokerage iterated.

Promoter/FII Holdings
Promoters held 0 per cent stake in the company as of 31-Dec-2022, while FIIs owned 13.81 per cent, DIIs 31.32 per cent.