ITC share price up 42% this year so far; Emkay sees further upside; here's why
ITC shares price has outperformed the equity benchmark Sensex strongly in the last one year yet the stock may have some steam left as the company's structural prospects remain healthy. The stock has surged about 61 per cent in the last one year against a 22 per cent gain in the benchmark Sensex. Shares of ITC have been on a roll since last year.
It gained 52 per cent in the year 2022 while Sensex rose marginally by 4 per cent. In 2023 so far, they have gained 42 per cent while the Sensex is up just 9 per cent. ITC stock can rise even more.
Brokerage firm Emkay Global Financial Services believes the stock can hit the ₹525 per share mark, an upside of about 11 per cent from the stock's closing of ₹472.10 on Monday on BSE. "We maintain our 'buy' recommendation on ITC with the June-24E target price of ₹525 per share, as we see firm structural prospects," said Emkay. The brokerage firm believes value unlocking in the hotels' operations remains a near-term catalyst.
As per media reports, ITC is trying to explore alternate structures for the hotel business and a separate listing of the hotel business is also one of the options considered. Read more: ITC's demerger for hotel business underway Emkay said that from the core cigarette business perspective, rational tax hikes may be possible ahead, given a higher share of the ad-valorem component leading to the build-up of volumes. This, along with improving mix, would aid a high-single-digit EBIT growth, said Emkay.
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