ITC shares at Rs 450! Is another 15% rise possible even after multibagger returns?

ITC has remained an outperformer in recent times. Shares of ITC hit its new record peak on Tuesday and analysts continue to remain positive on the stock. Both fundamental and technical experts suggest an up to another 15 per cent rise in the counter. The slow-and-steady diversified consumer product has outperformed the benchmark indices and other FMCG peers with a wide margin. The stock has turned multibagger in the last three years as the blue-chip counter has risen about 145 per cent from its Covid-19 lows. On Tuesday, shares of ITC rose 2 per cent to hit the Rs 395.15-mark, its new record peak. However, the stock had settled at Rs 388.70 on Monday. The total market capitalization of ITC hit Rs 4.90 lakh crore mark, making it the eighth-largest Indian company. A slightly more upside may help it to top Rs 5 lakh crore levels and may race past mortgage behemoth HDFC. In its recent report earlier this month, Sharekhan reiterated its 'buy' rating with a target price of Rs 450, suggesting a rise of 15 per cent. Attractive valuations at 23x/21x its FY2024/FY2025E EPS and double-digit earnings growth visibility make it our preferred pick in the large consumer goods space from a medium to long-term perspective, it said. "Recent amendment in the Finance Bill 2023 on tobacco/tobacco products is unlikely to have any material impact on tax rates on cigarettes. Volume growth momentum in the cigarette business is likely to sustain in the quarters ahead," it said. "Consistent good growth in the cigarette business, strong tailwinds in the hotel business and scale-up in non-cigarette FMCG business makes its earning visibility better compared with peers." Brokerage firms suggest that the company is likely to deliver double-digit growth in its cigarette volumes, while its other business volumes including paper, FMCG and hotel business may deliver robust performance, but the dominance of cigarette business is likely to continue. Brokerage firm Prabhudas Lilladher (PL) has an 'accumulate' rating on ITC with a target price of Rs 444, suggesting an upside of 13 per cent from its previous close. It sees ITC among the best performers from the consumer space in the March 2023 quarter. PL in its preview report expects cigarette volumes likely to expand by 14 per cent, while FMCG to post 17.5 per cent sales growth with YoY margin improvement. Paper business may grow 26 per cent, while Hotel revenues to grow by 66.3 per cent. It expects overall PAT to rise by 20.8 per cent YoY to Rs 5,060.9 crore with sales at Rs 17,236.5 crore. ITC remains among the preferred picks of Antique Stock Broking from this space. It has a buy rating on the stock with a target price of Rs 451. However, it said that on a sequential basis, demand off-take has seen some improvement, and a meaningful recovery could take more than expected time. "Recovery of demand in the rural space will be delayed with no visible signs of resumption in the near term. Softening of raw material prices will add to the cost savings and support margin expansion," Antique said. It expects ITC's net profit to rise 14.9 per cent to Rs 4,799.7 crore with sales growing 7.3 per cent to Rs 16,667.5 crore in the March quarter. On the technical front, ITC is trading above all its short-term as well as long-term moving averages indicating the underlying strength, said the experts decoding the charts. They believe that it is a good defensive bet in the volatile markets & a hedge to the portfolio. ITC on its quarterly charts, has seen a series of higher tops and higher bottoms formation from the past five quarters post a breakout of Rs 265 levels. This stock has been an outperformer among its peers and is likely to continue its performance going forward, said Sujit Deodhar, Head Technical Analyst at Wellworth Share & Stock Broking. "This stock is trading at its lifetime high, so investors should continue to hold on to their long positions for an upside target of Rs 430 in the next 1-2quarters as technical indicator MACD is in strong buy mode. For traders, any dip towards the support zone of Rs 360 levels should be utilized as a buying opportunity," he said.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Business Today)