ITC share price: ITC share price targets go well beyond Rs 500 after Q4 results. Should you buy, sell or hold?

Global brokerage firm Citi, which has a buy call on ITC, raised its target price to Rs 515 but warned that any change in taxation or other adverse regulatory pronouncements in the Union Budget after elections could impact volumes in the cigarettes business.

Morgan Stanley has an overweight rating on the stock with a target price of Rs 506. It said that the revenues were in line but earnings were higher than estimates owing to better margins.

CLSA has reduced near-term earnings estimates by 2-3% with a target price of Rs 470.

In the March quarter, ITC reported a 1% year-on-year (YoY) fall in its consolidated net profit at Rs 5,120 crore while revenue from operations increased 2% YoY to Rs 19,446 crore.Also Read | Hot Stocks: Brokerage view on BSE, Indigo, ITC; Goldman downgraded Gujarat PipavavStating that the resilient nature of its core business, amid an uncertain industry environment, and its 3-4% dividend yield make ITC a good defensive bet in the ongoing volatile interest rate environment, Motilal Oswal has given a target price of Rs 515.Analysts at Kotak Equities said for ITC’s valuations to sustain or re-rate, ITC needs to consistently deliver 2%+/5%+ volume/EBIT CAGR.

“We trim FY2025-26E EPS by 1% as we moderate FY2025E cigarette EBIT margin in view of leaf tobacco inflation. Paperboards profitability would continue to be under pressure in 1H even as topline growth is likely to improve, led by realisations. We roll over and revise our SoTP-based fair value to Rs 465 from Rs 460,” Kotak said.

Domestic brokerage JM Financial has among the highest targets of Rs 540 on ITC. “While FMCG business is tracking well, going ahead, acceleration in cigarette volume/EBIT growth along with sharper capital allocation strategy will be key for rerating from current levels,” it said.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)