ITC shares at Rs 480 or Rs 570? What stock analysts say

Shares of ITC Ltd were trading flattish in Friday's trade after a mixed set of December quarter results. Stock analysts are largely positive on the stock, but said urban consumption is weak and a rise in raw material prices are a worry. The stock was trading 0.57 per cent lower at Rs 438.90. Analysts largely see the stock in the Rs 475-571 range.

MOFSL has cut its EPS estimates by 4 per cent for FY25 and 5 per cent for FY26, mainly due to the demerger of the hotel business. It said ITC’s core business of cigarettes has shown steady performance.

"With stable taxes on cigarettes, we anticipate sustainable growth in this business. While the FMCG sector is seeing moderation due to the rising commodity prices, ITC is enjoying industry-leading growth over peers due to its category presence. We reiterate our BUY rating on ITC with target of Rs 550," it said.

Systematix Institutional Equities said cigarette sales growth may benefit from innovative product launches, better performance from premium products and continued stability in taxation. But with realisations lagging elevated input costs, margins will likely remain pressured the near-term, it said.

"FMCG business growth will likely moderate in near term on depressed urban consumption (while rural gains momentum), and margins will likely downtrend given inflation and price lags. However, ITC’s strong positions in key categories (atta, biscuits, noodles, snacks) should help it leverage a medium-term demand recovery," the brokerage said. This brokerage suggested a target price of Rs 475 on the stock.

Emkay Global said it remains hopeful of an improved topline and expects the margin stress to ease from FY26, which is likely to lead to resumption of the double-digit earnings growth trajectory. This brokerage has removed the Hotels business projection and factored in ITC’s stake as investment with 20 per cent holdco discount.

Nuvama is cautious on the stock in the near term, given the ongoing urban slowdown, inflation in key raw material and weak profitability in FMCG and paperboards, paper & packaging segment; retain ‘BUY’ with SoTP target of Rs 571.

Nirmal Bang said while it remains constructive on ITC from a medium term perspective, it maintained a 'Hold' rating on the stock, owing to limited upside. Its target price of Rs 480 offers limited upside post this run-up.