1:10 Split, 3 Bonus, Rs 193.7/Sh Dividend: Rs 15-To-425, FMCG ITC A Bull Stock To Buy, Highest Target Rs 555

ITC Ltd is among top bull stocks of experts when it comes to the FMCG sector. This second largest FMCG player is recommended to buy for the highest target of Rs 540 and Rs 555 ahead of the election. This will lead to a potential of 27% upside ahead. ITC is a long-term wealth creator, giving robust 2,693% returns in over 2 decades.

On BSE, ITC share price is at Rs 425.95 apiece, with market cap of Rs 5,31,786.71 crore. Currently, ITC is undervalued as it is lower by nearly 15% from its 52-week low of Rs499.60 apiece, while it is higher by 8.4% from its 52-week low of Rs 393 apiece.

The next big sentiment driver for ITC is its Q4 and full-year earnings for FY24.

ITC has surged by as massive as 2693.11% in 21 years. The stock was merely a little over Rs 15 on April 16, 2003. If an investor was worth Rs 1,00,000, 21 years ago in ITC, then now the same investment is worth over Rs 27.93 lakh, with returns of massive Rs 26.93 lakh on the investment value.

Since 2003, ITC has also paid behemoth dividends to the tune of Rs 410.7 apiece cumulatively.

At latest, in 2024, ITC turned ex-dividend in February for an interim dividend of Rs 6.25 per share or 625% having a face value of Re 1 each for the financial year ending on 31st March 2024. As per Trendlyne data, since July 2001, ITC has delivered up to 28 dividends to its investors. In the last 12 months, ITC has paid up to Rs 15.75 per share dividend.

Not just that the gains in ITC are also adjusted to its 1 stock split and 3 bonus shares that were issued after 2003.

The FMCG giant split by 1:10 ratio in September 2005. ITC split its 1 equity share into ten equity shares. The face value was trimmed to Re 1 from Rs 10, hence, a stock split ratio of 1:10.

In terms of bonus shares, the has also distributed bonus shares rewards thrice since its listing. The first bonus issuance was in September 2005, for a 1-to-2 ratio. This meant that ITC awarded 1 new bonus share on the existing two equity shares. ITC further declared a 1:1 bonus issue in August 2010, and a 1:2 ratio in July 2016.

Ahead Q4 earnings will keep ITC in limelight. In Q3FY24, ITC's Gross Revenue stood at Rs.17,483 crores representing a growth of 2.1% YoY (excl. Agri-Business: up 3.9%) while PBT (before exceptional items) at Rs. 6,731 crores grew by 0.8% YoY. PAT grew by 10.8% YoY to Rs. 5,572 crores. Earnings Per Share for the quarter stood at Rs. 4.47 (previous year Rs. 4.06).

The highest target in ITC is of Rs 540 by Fisdom. Meanwhile, the 1-year average target of ITC is Rs 502 apiece, hinting at a potential 17% upside. As per Trendlyne data, the consensus recommendation from 34 analysts for ITC Ltd. is BUY.

ITC is Fisdom's annual pick. The brokerage said, that ITC, on the broader time frame, is trading in a higher high or low formation and consistently sustaining above its medium and long-term averages. ITC has witnessed a bullish flag pattern breakout on the monthly chart after a time-wise correction.

Fisdom's note further added, the momentum oscillator RSI (14) on the lower panel reads in a higher, higher, and lower formation and in a bullish range shift zone. The MACD indicator is reading above its line of polarity. Lastly, it said, the counter has given a rectangle pattern breakout on the weekly chart, confirming a double price breakout.

ITC is one of India's foremost private sector companies and a diversified conglomerate with businesses spanning Fast Moving Consumer Goods, Hotels, Paperboards and Packaging, Agri Business and Information Technology.

Fisdom's first target is of Rs 515 in ITC, while its highest and 2024 target is of Rs 540.

Moreover, JM Financial has so far set the highest target price of Rs 555 on ITC.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.