ITC share price fell more than 1% on Friday despite the company's Q4FY23 results largely impressing Dalal Street analysts. So far this year, the stock has jumped around 25%.
In the last one year, ITC share price has surged over 50%. The stock which remained below Rs 350 till 2017, hit an all-time high of Rs 433, earlier this month.
ITC share price has rallied from Rs 17 in January 2000 to Rs 420 today, logging a gain of more than 2,300%. The has fallen nearly 1% in the last five sessions. Should investors buy this dip? Here's what analysts say.
According to share market analysts, under-ownership of domestic institutional investor (DII) and positive momentum at cigarette and hotels businesses should keep ITC stock afloat going ahead, even as it trades near record high levels.
As per Preeyam Toila, Senior Research Analyst - FMCG & Retail, Axis Securities, ITC is firing on all cylinders as all its businesses are on the right track which makes ITC a better play in the entire FMCG pack. "Moreover, good dividend yield and reasonable valuation compared to other FMCG peers provide a vast margin of safety," Toila said.
Axis Securities has a 'buy' call on the stock with a target price of Rs 480. With a stable growth outlook, and steady and decent performance outlook in paperboard and agribusiness, ITC makes a better play in the entire FMCG pack where valuations of other players stand elevated, it said.
Prabhudas Lillader has 'Accumulate' call on the stock with a target price of Rs 455. According to PL analysts, ITC's Hotel outlook is positive due to G20 & revival in business and foreign tourist travel. "While near-term outlook is strong, we estimate 10.7% EPS CAGR over FY23-25," it said, adding that ITC has scope to increase cigarette profitability.
Motilal Oswal has a 'buy' rating on ITC stocks with a target price of Rs 485. "With no material increase in cigarette GST/national calamities duty in the recent budget, the volume growth outlook remains healthy," it said, adding that ITC’s earnings visibility remains better than peers.
Brokerage firm Sharekhan also has a 'buy' call on ITC stock. It expects the company to maintain the double-digit earnings growth with with consistent improvement in margins led by uptick in the consumer demand and favorable business environment for the hotel business. "This along with discounted valuation to peer makes it a good fit in the large cap FMCG space," it said.
Kotak Institutional Equities finds the ITC stock worth Rs 450. Meanwhile, HDFC Institutional Equities is not-so-bullish on the stock after the recent run-up. It said the recent stock run-up in the stock limits further rerating potential. The brokerage has a target of Rs 395 on ITC stock.
Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Business Today. Investors should consult their financial advisors before taking any position.