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ITC, which is also a Sensex stock, which hit a fresh 52-week high of Rs 282.30 on the BSE on 20 May 2022, lost some momentum, but experts are of the view that it is still a buy at current levels for a 12-month target above Rs 300, suggest experts.

Long-term investors can look at putting fresh money at current levels or on dips for a target towards Rs 310, they say.

ITC 24 MayETMarkets.com

ITC has a market capitalization of Rs 3.3 lakh crore and reported strong March quarter results. Earlier in May, the FMCG major reported an 11.80 per cent year-on-year (YoY) rise in standalone net profit at Rs 4,190.96 crore for the March quarter compared with Rs 3,748.42 crore in the same quarter last year.
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“Fundamentally, ITC reported a well-rounded quarter. It has offered a combination of decent growth, dividend yield & inexpensive valuation. Hotels, paperboard, and Agri-business are tracking well,” Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd, said.

“We expect earnings to grow by 15% in FY23 & by 8.1% in FY24E. Stock is currently trading at a valuation of 17.6 times P/E to the earnings of FY24Estimates (which should be at Rs.15.2),” he said.

Kotak Securities value ITC using (SoTP) methodology, which is the Sum of the Parts and keeping the price target of Rs 310.

Technically, the stock is trading well above crucial short- and long-term moving averages of 5,10,20,50,100 and 200-DMA, which is a positive sign for bulls.

Technically, the stock has formed a classic bullish continuation formation on a daily chart and after the announcement of the Q4 numbers, ITC closed above the highest of the previous move, which was at Rs 273.

“Above the level of Rs 273, it has meaningful resistance only at 310, which it has formed during the year 2019. It’s a buy at current levels,” recommends Chouhan.

(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)


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