Overweight on ITC with a target of Rs 395: Morgan Stanley
The strong cigarette business performance may catalyze stock re-rating. ITC reported cigarette volume growth of 0-1% for the quarter ended March, said the MS note.
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| Updated: Morgan Stanley maintains an overweight rating on ITC post March quarter results with a 12-month target price of Rs 395.
The strong cigarette business performance may catalyze stock re-rating. ITC reported cigarette volume growth of 0-1% for the quarter ended March, said the MS note.
"The growth compares to our and the market's expectation of a 2-3% volume decline, added the note. We were surprised by the ability to capture cigarette volumes amid muted pricing growth," added the note.
The strong cigarette volume growth increased the probability of marginal price hikes in 2HF17 which will aid margin growth.
The strong cigarette business performance may catalyze stock re-rating. ITC reported cigarette volume growth of 0-1% for the quarter ended March, said the MS note.
"The growth compares to our and the market's expectation of a 2-3% volume decline, added the note. We were surprised by the ability to capture cigarette volumes amid muted pricing growth," added the note.
The strong cigarette volume growth increased the probability of marginal price hikes in 2HF17 which will aid margin growth.
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