Stock Market Today: ITC share price gained marginally in the morning trades on Monday post Q1 results: Should you buy or sell the stock?
ITC Q1 Results
On Friday, post-market hours, ITC Ltd reported an almost 2% gain in its standalone June quarter profit at ₹4,912.36 crore, up from ₹4,819.93 crore a year ago, but lower than expected. During the quarter, the conglomerate’s expenses increased by 12.7% to ₹12,872.66 crore.
During the reporting quarter, standalone revenue from operations increased by 19.7% to ₹21,058.98 crore from ₹17,593.02 crore the previous year, driven by excellent performance in the agro and tobacco businesses.
ITCs’ Cigarette volumes rise
ITC’s cigarette volume growth accelerated to a multi-quarter high of more than 6%, which was better than our estimates & continued to be in excess of many of the FMCG peers, said Jefferies India Pvt Ltd.
However, segment EBIT margins continued to decline, while EBIT was just in line, added Jefferies.
Other segments reported lower-than-expected EBIT, mostly owing to margin pressure. Overall EBITDA growth was moderate at 3%, somewhat below our expectations, said Jefferies
Motilal Oswal Financial Services said that ITC sustained healthy performance in core segments in a tepid consumption environment, though margins remained under pressure. Gross cigarette sales growth of 8% YoY was higher than MOFSL’s 6% estimates, and volume growth of 6% was also higher than MOFSL’s 5% estimates. The premium cigarette segment continued to outperform, as per MOFSL.
Analysts recommendations
Jefferies has marginally lowered their earnings per share estimates and kept the buy rating, with a target price of Rs535.
Motilal Oswal Financial Services, on the other hand, said that they expect valuation re-rating. if ITC sustains mid-single-digit volume growth in cigarettes and the FMCG business sees a recovery in FY26. They reiterate their BUY rating on ITC with their SOTP-based target price of ₹500 (implying 26x June’27 estimated price to earnings).
Disclaimer: The views and recommendations above are those of individual analysts or brokerage companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
