ITC Shares Gain As Analysts Stay Bullish On Attractive Valuations – Key Triggers To Watch

Last Updated:May 23, 2025, 12:11 IST

ITC Share Price Today: ITC Ltd. shares were trading in the green on Friday, May 23, following the release of its March quarter results

ITC Share Price Today: ITC Ltd. shares were trading in the green on Friday, May 23, following the release of its March quarter results. Despite a mixed earnings report that highlighted both strengths and weaknesses, investor sentiment remained positive.

ITC Ltd. reported its March quarter results recently, delivering a mixed set of numbers. While some segments met or exceeded expectations, others fell short, prompting analysts to revise their price targets, though most remain positive on the stock due to its attractive valuation.

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Revenue and Cigarette Volumes Meet Expectations

ITC’s revenue for the quarter stood at Rs 17,248 crore, surpassing CNBC-TV18’s estimate of Rs 16,820 crore. Cigarette volumes, a key contributor to the company’s profits, grew by 4–5%, aligning with market expectations. This steady performance in its core business reassured investors and analysts alike.

EBITDA, Margins, and FMCG Segment Disappoint

Despite the strong top-line performance, profitability metrics were weaker than anticipated. EBITDA came in at Rs 5,986 crore, falling short of the Rs 6,100 crore estimate. The operating margin declined to 34.7%, below the forecasted 36.3%.

The FMCG segment also underwhelmed, posting revenue growth of 3.7%, which was below the expected 6–8% range. Additionally, FMCG EBIT margins contracted by 270 basis points year-on-year, exceeding the projected decline of 200–300 basis points. Analysts cited inflationary pressures, particularly in palm oil, as key contributors to this decline.

Should You Buy, Sell Or Hold?

Despite the mixed results, analysts have largely retained their ‘Buy’ recommendations. However, several brokerages have revised their price targets downward.

• Jefferies maintained a ‘Buy’ rating but trimmed the target to Rs 535 from Rs 550, noting that ITC’s performance was broadly in line despite challenges in the FMCG and paperboard segments.

• Goldman Sachs also kept a ‘Buy’ rating, with a target of Rs 490. It expects a gradual recovery in cigarette segment margins as tobacco inflation subsides and highlighted potential margin improvements in the FMCG segment due to easing palm oil prices.

• HSBC has a ‘Buy’ rating with a target price of Rs 510, citing ITC’s compelling valuation and a stable tax environment.

• CLSA rated the stock ‘Outperform’, setting a target price of Rs 496.

• Nuvama Institutional Equities reiterated its ‘Buy’ rating but reduced the price target from Rs 571 to Rs 532, noting that palm oil correction and strong agri exports, aided by a good monsoon, could support performance in FY26.

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