1:10 Split Ahead: FMCG Giant ITC Near 52-Week High, Gains 10% YTD; BUY, What Is Next Big Target?

FMCG giant ITC shares have made a massive turnaround in YTD, with gains of nearly 10%. The double-digit upside especially gets a boost from Union Budget 2024, where no key changes were announced for the tobacco business since ITC is the largest cigarette maker in India. The start of September has also been robust with ITC stock hitting a new all-time high. Currently, the stock continues to trade near its record levels. Does that mean ITC is overvalued or undervalued? Should investors buy the stock ahead? And lastly, what is the next big target price in ITC?

ITC is set to demerge its hotel business which will be in the ratio of 1:10. Because as part of the merger process, for every (Ten) Ordinary Share 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.

The highest target price is Rs 585 in ITC with a buy recommendation.