1:10 Split, 3 Bonus, 29 Dividends: FMCG Stock ITC Gives Zero Returns In 1-Month; PL Says Accumulate, Rs 541 TP

FMCG giant stock, ITC Ltd has broadly witnessed a bearish tone in October month, creating a buy-on-dips opportunity ahead. ITC's weekly performance is down by 0.5%, while on month-on-month, the stock has given zero returns since it dropped by 4.24%. ITC has also pulled back from its Rs 500 mark. Amidst the latest trend, brokerage Prabhudas Lilladher has recommended ACCUMULATE on ITC stock for a target price of Rs 541.

There is the potential of over 11% upside in ITC ahead. Currently, the stock price is at Rs 486.65 apiece, with a market cap of Rs 6,08,682.29 crore. The stock's price-to-equity ratio is at 29.78x, while the return on equity is at 28.29%. YTD, the stock is up by 4%.

Prabhudas forecasts ITC's revenue to come to around Rs 711.3 billion by 2025-end, while PAT is estimated to be at Rs 215.9 billion.

Going ahead, ITC is going to demerger its hotels business which will be in the ratio of 1:10. Because as part of the merger process, for every (Ten) Ordinary Shares of the face and paid-up value of Re. 1 each held in ITC, 1 (One) equity share of the face and paid-up value of Re. 1 in ITC Hotels. After the completion, ITC's stake will be reduced. The shareholders of ITC will hold about 60% of ITC Hotels directly, which is proportionate to their shareholding in ITC. The balance stake of about 40% will be held by ITC.

ITC Corporate Actions:

Since its listing, ITC has rewarded investors with bonus issues, stock splits and dividends over the years since its listing.

Dividends: The FMCG giant has delivered up to 29 dividends since July 2001, as per Trendlyne data. In the last 12 months, the dividend payout is Rs 13.75 per share. While its dividend yield is of 2.63%.

Bonus Issues: The company has a strong track record of bonus shares. 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.

Bonus Issues: The company has a strong track record of bonus shares. 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.