ITC Share Price: Despite the year-to-date performance being red, FMCG giant ITC stock is hot to buy this week. ITC has gained by 1% each on a weekly and month-on-month basis on BSE. However, the stock is currently around Rs 410 levels, near its 52-week low. This brings in buying opportunities in ITC. Brokerage SMC Global Securities has added ITC to its fundamental picks for a trading week from March 17-21, with a short-term target price of Rs 484.
ITC Share Price:
After market hours on March 18, ITC stock stood at Rs 409.40 apiece on BSE, with a market cap of Rs 5,12,300.88 crore. The stock's 52-week high and low is at Rs 500.01 apiece and Rs 381.24 apiece respectively. Its price-to-equity ratio is around 24.80X, while its return on equity is at 28.31%.
ITC is down by 12% year-to-date but has surged in the past month. Its all-time gain is about 7,849.51%. Once upon a time, ITC stock was around Rs 5.15 levels on July 14, 1995.
The FMCG player holds a strong record of dividends, splits and bonus issues.
Dividend: ITC has delivered about 28 dividends since July 2003, as per Trendlyne data. In the past 12 months, ITC paid dividends amounting to Rs 14.00 per share.
Bonus Issue: The last bonus was of 1:2 ratio in July 2016, while ITC delivered 1:1 and 1:2 bonus ratios in August 2010 and September 2005. ITC has overall delivered 3 bonus shares.
Stock Split: Additionally, ITC has carried a single stock split so far. In September 2005, ITC's shares split from Rs 10 face value to Rs 1 each, hence a ratio of 1:10.
Why BUY ITC Stock?
SMC Global Securities in its note said, "The company has expanded its food division by acquiring Prasuma. This acquisition would further fortify ITC's presence in these future-facing categories. The companys focus on digital transformation along with business expansion would help drive future growth with efficiency. Thus, it is expected that the stock may see a price target of Rs.484 in 8 to 10 months' time frame on one average P/Bv of 7.76x and FY26 BVPS of Rs. 62.40."
7 reasons why buy ITC stock, as per SMC's latest note:
1. ITC is a diversified conglomerate with businesses spanning fast-moving consumer goods, hotels, paperboards and packaging, agribusiness and information technology.
2. Recently, the company set-up eight state-of-the-art manufacturing units which include a Foods facility, a Moulded Fibre factory for plant-based sustainable packaging and a unit for personal care products. Other recent investments include a global spices processing facility, a world-class packaging plant, an export-focused plant and 2 integrated consumer goods facilities. The company plans to invest Rs. 20,000 crore across various businesses in the medium term.
3. ITCMAARS, an eco-system for production of quality produce has developed plans to connect over 4,000 Farmer Producer Organisations (FPOs) and impact 10 million farmers in the next five years. The innovative digital platform empowers 1.7 million farmers currently. The company expects this farmer addition would be the backbone of the company's agri-value chain for sourcing produce.
4. ITC is scaling up the cultivation of medical and aromatic plants to expand its presence in the fast-growing health and wellness products market in food, personal care and other categories. The initiative will support ITC's FMCG ambitions and leverage the B2B nutraceuticals space.
5. As part of the ITC Next Strategy, the company is institutionalizing a digital first culture with digital adoption being implemented across every node of its operations spanning smart sourcing, smart insighting, smart manufacturing, smart distribution and smart consumers.
6. The company plans to buy 100% stake in Prasuma, a leading player in the frozen, chilled and ready to cook foods space in India. The first tranche of 43.8% stake shall be acquired upfront and balance stake will be acquired, in tranches, by June, 2028. It plans to jointly building an unparalleled, full stack frozen, chilled and ready to cook foods portfolio.
7. ITC's cigarettes business continues to make strategic portfolio and market interventions, with focus on competitive belts and to counter illicit trade, to drive volume-led growth and reinforce market standing.
Among key risks for ITC are --- high commodity price and economic slowdown, as per SMC.
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