ITC’s FMCG portfolio’s consumer spend exceeded INR 240,000 Mn annually with reach of over 200 million households in India. The portfolio is built with focus on strengthening core brands, entering adjacent segments through great brands and entering categories that can fuel future growth. ITC’s Agri business is one of India’s largest exporters of Agri commodities. It sources over 4 Mn tonnes of agricultural produce from 22 states. The business is scaling up its VAAP (Value-added Agri products) portfolio comprising of Spices, Coffee, Frozen Marine Products and Processed Fruits amongst others for domestic and export markets. The paperboards and packaging business is a pioneer in sustainable packaging and a leader in the value-added paperboards segment. The company has multiple brands like Aashirvaad, Sunfeast, Classmate and Mangaldeep that are leaders in their respective segments. The company launched several variants in the cigarette segment to meet the evolving needs of its consumers. These launches include Classic Connect, Gold Flake Indie Mint, Gold Flake Neo SMART Filter, Wills Protech, Capstan Excel, American Club Smash, Gold Flake Kings Mixpod, Wave Boss and Flake Nova.
Outlook
We value ITC shares using SOTP (Sum of the parts) approach implying 12.2x EV/EBITDA on FY24E EBITDA of Cigarette business; 19.4x EV/EBITDA on FY24E EBITDA of Hotel business; an average 6.3x EV/EBITDA on FY24E EBITDA of Agri business; 5.6x EV/EBITDA on FY24E EBITDA of Paper business and 7.4x EV/Revenue on FY24E Revenue of FMCG business – to arrive at our target price to INR 325 per share. Accordingly, we maintain our “BUY” rating on ITC Ltd shares.
At 15:40 hrs ITC was quoting at Rs 291.80, up Rs 7.45, or 2.62 percent.
It has touched an intraday high of Rs 293.30 and an intraday low of Rs 284.85.
It was trading with volumes of 1,000,516 shares, compared to its thirty day average of 577,715 shares, an increase of 73.18 percent.
In the previous trading session, the share closed up 3.99 percent or Rs 10.90 at Rs 284.35.
The share touched its 52-week high Rs 285.00 and 52-week low Rs 200.85 on 01 July, 2022 and 09 July, 2021, respectively.
Currently, it is trading 2.39 percent below its 52-week high and 45.28 percent above its 52-week low.
Market capitalisation stands at Rs 360,021.14 crore.