₹520 to ₹430. “We reduce our target multiple on cigarette business to 18x from 25x, given the overhang, as highlighted above. Downgrade ITC to Hold, with a revised PT of ₹430 (vs.
₹520 earlier)," the brokerage firm said in its report. Also read: ESAF SFB stock slides over 16% even after net profit surges 200% YoY; here's why Over the last three years, ITC stock has given a return of more than 3x from led by strong cigarette volume growth, scale-up in FMCG, improved capital allocation, & increase in FII holding. In its earnings release, ITC's largest shareholder, British American Tobacco (BAT), confirmed its intent to divest ITC stake.
BAT stated, “We have a significant shareholding (in ITC) which offers us the opportunity to release and reallocate some capital. We have been actively working for some time on completing the regulatory process required to give us the flexibility to monetise some of our shareholding (in ITC)." The company maintains a significant 29.03 percent ownership stake in ITC, valued at approximately ₹1.5 lakh crore. Asserting its stance, the firm has indicated that possessing a 25 percent stake in the company suffices to uphold its strategic influence.
Also read: Jefferies sees 15% upside for Bharti Airtel stock; lists three key takeaways for Bharti Hexacom IPO “ITC has had a strong run in the last 2-3 years with a strong recovery in cigarette volumes post Covid-19, which also led to a re-rating of the stock. With overhang from BAT stake sale, two taxation events over the next 12 months, and slowdown in volume growth, we expect the stock to remain range-bound going forward," Jefferies said. The brokerage firm further indicated that a prospective divestiture of a four-percentage-point stake could carry
. Read more on livemint.com