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'Buy' This Stock For +17% Upside In 6 Months: HDFC Securities

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Brokerage firm HDFC Securities has recommended investors to buy ITC Ltd.'s stocks with a potential upside of 17.32%, within a target period of 6 months (2 quarters).

 

Target Price

Target Price

The Current Market Price (CMP) of ITC Ltd is Rs. 231.85. The brokerage firm, HDFC Securities has estimated a Target Price for the stock at Rs. 272. Hence the stock is expected to give a 17.32% return, in a Target Period of 6 months.

Stock Outlook
Current Market Price (CMP) Rs. 231.85
Target Price Rs. 272
6 months return 17.32%

Company performance

Company performance

ITC's FMCG business gained momentum due to Covid-19 as revenue in 9MFY21 grew by 14% Y-o-Y, while EBIT witnessed 2.3X growth (driven by hygiene and personal care categories) as margins doubled. The paper boards and packaging business grew by 17% in 9MFY21. The agri-business had a good Q3FY21 with 18.5% Y-o-Y growth, driven by trading opportunities in rice, soya, and wheat exports. However, leaf exports were impacted by subdued demand for leaf tobacco in international markets.

Comments by HDFC Securities
 

Comments by HDFC Securities

Maintaining a Buy rating HDFC securities said, "Taking the advantage of the favorable market, the company came up with 100+ launches post lockdown. We expect this strong momentum to continue in the near future." The firm additionally mentioned that ITC's hotels business (3.4% of revenue) is likely to stay impacted due to travel restrictions.

About the company

About the company

ITC has a diversified presence in cigarettes, FMCG, hotels, packaging, paper boards, and specialty papers, and agri-business. Apart from having a near-monopoly in its traditional business of cigarettes, ITC is the country's leading FMCG marketer, a clear market leader in the Indian paper board and packaging industry. ITC is a globally acknowledged pioneer in the wide-reaching agribusiness and a pre-eminent hotelier in India - a trailblazer in 'Responsible Luxury' chain of hotels.

Disclaimer

Disclaimer

The above stock was picked from the brokerage report of HDFC Securities. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.

(Also read: 'Buy' This Stock For +40% Upside, In 1 Year: Sharekhan Recommends)

Read more about: stocks to buy shares to buy
Story first published: Wednesday, November 24, 2021, 10:33 [IST]
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