ITC shares jump 1% post marginal miss on Q1 estimates. Should you invest?
FMCG major ITC surged by a little over 1% on Friday to the day’s high of Rs 499.35 on BSE after the firm’s first-quarter net profit was reported at Rs 4,917.45 crore, which was a marginal uptick from a year ago’s net profit of Rs 4,902.74 crore.
The profit after tax was below Street's estimates of Rs 5,122 crore.
The FMCG segment recorded a total revenue of Rs 13,409.13 crore in the June quarter, up from Rs 12,631.28 crore in Q1FY24 and Rs 13,225 crore in Q4FY24.
Meanwhile, the hotel's business revenue in Q1FY25 stood at Rs 665.56 crore versus Rs 600.18 crore in Q1FY24.
Here is what analysts from various brokerages say:
Jefferies: Buy| Target price: Rs 585
Jefferies maintained a buy call on ITC with a target price of Rs 585.
The cigarette business volume growth of 3% was in line and a stable taxation provides visibility of momentum continuing in the coming quarters. Other segments, however, were disappointed in revenues as well as margins. The tough macro environment had an impact, but most businesses should see improvement ahead.
Nuvama: Buy| Target price: Rs 585
Nuvama has retained its buy view on ITC with a hiked target price of Rs 585 from an earlier Rs 540.
Factoring in no tax hike in the FY25 Budget and a likely rural consumption revival H2FY25 onwards, Nuvama increased ITC’s cigarette business target multiple to 24x (from 22x). According to the company, improving agri-terms of trade, expectations of normal monsoons and the government's thrust on public infrastructure and the rural sector in the
