FMCG giant ITC stock price traded volatile on BSE during the special trade on Saturday, February 1 due to the Union Budget announcement. ITC ended the last weekly session of January on a positive note, with the upside of over 1.1%. Next week, the stock will be in focus for its upcoming interim dividend and Q3 results.
ITC Share Price:
At the time of writing, ITC stock price was at Rs 445.85 apiece, down by 0.4% on BSE with a market cap of Rs 5,57,834.61 crore. The stock's 52-week high and low are at Rs 500.01 and Rs 377.74 apiece respectively.
From January 27-31, ITC stock surged by more than 1.1%. Nonetheless, overall in January month, the stock dipped by nearly 4%.
ITC Q3 Results Preview:
As per the regulatory filing, the company said, a Meeting of the Board of Directors of the Company has been convened for Thursday, 6th February 2025, inter alia, to: consider and approve the Unaudited Standalone and Consolidated Financial Results of the Company along with the Unaudited Segment-wise Revenue, Results, Assets and Liabilities for the Quarter and Nine Months ended 31st December, 2024.
In its preview note, Nirmal Bang said, "We expect ITC's overall topline growth to be ~14% YoY on the back of broad-based growth across segments led by Agri, Hotels and Cigarettes business. Cigarette sales are likely to grow by 7.5% YoY with volume growth expected to be in mid-single digits YoY. Volume growth for the Cigarette business on a 5-yr CAGR basis is likely to remain moderate at 2.7% YoY."
Further, Nirmal Bang expects the growth momentum in Agribusiness to continue on a low base.
Additionally, Nirmal Bang's report said, 'We expect the Hotels business to grow by 11% YoY. The FMCG-Others business is expected to grow by 7% YoY. Paperboards, Paper & Packaging business is likely to increase by 5% YoY. We expect EBITDA margin to decline by 270bps to 33.8% (up 100bps QoQ). While EBITDA is expected to increase by ~6% YoY, APAT (before amortization) is expected to decrease by ~7% YoY."
ITC Interim Dividend:
On February 6th, the company will also consider a declaration of an Interim Dividend for the financial year ending on 31st March 2025.
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.
ITC also holds a strong record of splits and bonuses.
ITC's latest 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.
Also, 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.
ITC Share Recommendation:
KR Choksey said, "We value ITC Ltd on a Sum-of-the-Parts (SOTP) basis and have revised our target price to INR 520 post the demerger of its hotel business, wherein ITC will retain a 40.0% equity stake. Previously, the hotel segment was valued at an EV/EBITDA multiple of 17.3x. Following the demerger, we have adjusted the target price by INR 12 per share, accounting for the 40.0% retained holding and a 20.0% holding company discount, resulting in a revision of the target price from INR 534 to INR 520."
Finally, KR Choksey's note added, "The demerger of ITC Ltd's hotel business unlocks value by allowing ITC to focus on its high-margin, cash-generative core segments, while the standalone hotels entity gains the flexibility to capitalize on industry growth and attract strategic investors. This move enhances resource allocation, supports distinct growth trajectories for both entities and is expected to improve valuation multiples. Accordingly, we upgrade our rating on ITC Ltd to "BUY" from "ACCUMULATE".
About ITC Ltd:
TC is one of India's foremost private sector companies and a diversified conglomerate with businesses spanning Fast Moving Consumer Goods, Paperboards and Packaging, Agri Business and Information Technology.
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