ITC has good 10-15% upside: Saurabh Mukherjea, Ambit Capital
A stock like ITC - as a straightforward defensive play in the current climate - will stand out.
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| Saurabh Mukherjea, Head of Equities, Ambit Capital, in a chat with ET Now talks about ITC.
What’s your view on ITC?
A stock like ITC - as a straightforward defensive play in the current climate - will stand out. They have enormous pricing power. One of the things about cigarettes is obviously demand is relatively inelastic relative to your prices. So as input costs inflation comes through, what a company like ITC has shown for a long period of time is their ability to raise prices to more than compensate for input cost inflation. That sort of pricing power is very rare in our country. To be able to jack your prices up and not see a meaningful shortfall in demand is very rare in our country. So even after the recent appreciation, we think ITC has good 10-15% upside.
What’s your view on ITC?
A stock like ITC - as a straightforward defensive play in the current climate - will stand out. They have enormous pricing power. One of the things about cigarettes is obviously demand is relatively inelastic relative to your prices. So as input costs inflation comes through, what a company like ITC has shown for a long period of time is their ability to raise prices to more than compensate for input cost inflation. That sort of pricing power is very rare in our country. To be able to jack your prices up and not see a meaningful shortfall in demand is very rare in our country. So even after the recent appreciation, we think ITC has good 10-15% upside.
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