Neutral on ITC, target price Rs 225: Motilal Oswal

Motilal Oswal has neutral call on ITC with a target price of Rs 225. The current market price of ITC Ltd. is Rs 214.55 Time period given by analyst is one year when ITC Ltd. price can reach defined target.

ITC Ltd., incorporated in the year 1910, is a Large Cap company (having a market cap of Rs 261439.85 Crore) operating in Tobacco sector.

Financials
For the quarter ended 30-06-2021, the company reported a Consolidated Total Income of Rs 14687.80 Crore, down -1.57 % from last quarter Total Income of Rs 14921.76 Crore and up 37.28 % from last year same quarter Total Income of Rs 10699.20 Crore. Company reported net profit after tax of Rs 3343.44 Crore in latest quarter.


Investment Rationale
Continued sub-par growth in EBIT in the mainstay Cigarettes biz and tepid underlying cigarette volumes act as deterrents for a valuation re-rating. Thus, ITC’s valuation of ~15x FY23E appears fair.

Promoter/FII Holdings
Promoters held 0 per cent stake in the company as of June 30, 2021, while FIIs held 11.9 per cent, DIIs 42.4 per cent and public and other 45.8 per cent.