HSBC stays ‘Overweight’ on ITC

HSBC has retained its ‘Overweight’ rating on ITC and increased the target price to Rs 286.

“Due to recent price hikes across the cigarette segments, we raise our estimates and roll our 12-month fair target price to March FY13e,” said HSBC analysts in a note to the client.

Key downside risks are slower-than-anticipated progress or loss of market share in growing categories in “other FMCG” and/or excessive VAT hikes by the state governments. ITC has run up 21% in the past two months, outperforming the sector and the market.