CLSA has maintained a “buy” call on the stock with the target at Rs 265 per share. Here’s why
ITC share price jumped over 7 percent in the morning session hitting a 6-month high on the BSE. The stock has gained 10 percent in the last 1-month compared to the FMCG index which was up over 11 percent, in the same time period.
The stock was trading at Rs 229.30, up Rs 13.30, or 6.16 percent. It has touched an intraday high of Rs 233.30 and an intraday low of Rs 216.40.
ITC’s price movement since last 1 month
The scrip was trading with volumes of 4,629,684 shares, compared to its five day average of 1,011,825 shares, an increase of 357.56 percent.
Last week, global research firm CLSA maintained a “buy” call on the stock with the target at Rs 265 per share. The brokerage firm is of the view that the FMCG business is firmly on the path for a profitable scale-up. It expects its FMCG business to deliver a 31 percent EBITDA CAGR over FY20-24, a CNBC-TV18 report said.
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“Unlike in the past, inorganic growth should offer an additional growth lever. The valuation is compelling with record-high PE discount to FMCG average and a 6 percent dividend yield,” it added.
The company’s chairman and managing director Sanjiv Puri told shareholders at their 110th Annual General Meeting (AGM) that digital and sustainability, the two defining trends of the new normal, are going to be ITC’s focus in the years ahead and the company will continue to explore opportunities anchored at the intersection of these two.
The FMCG business’s gross revenue and profit after tax for FY21 stood at over Rs 48,000 crore and Rs. 13,000 crore, respectively.
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