ITC Ltd: A Strong Buy This Diwali with Projected 22% Upside and Robust Growth Potential

ITC Ltd is attracting significant attention as a strong investment opportunity this Diwali season in 2024. Currently priced at approximately ₹487.95, the stock has a projected target price of ₹594, indicating a potential upside of around 22% over the next 12 months. Over the past six months, ITC has rebounded by over 12%, despite a recent decline from its all-time high of ₹528.55.

Key Highlights:

• Market Performance: As of October 29, 2024, ITC shares closed at ₹487.95, up by 0.80%, with a market capitalization of ₹6,10,410.44 crore. The stock’s 52-week range is between ₹399.30 and ₹528.55.
• Financial Metrics:
  • Price-to-Earnings (P/E) Ratio: 29.64x
  • Return on Equity (ROE): 28.22%
  • Year-to-Date Gain: 4.4%
  • All-Time Gain: 9,003.54%
• Dividends and Bonus Shares: ITC has a robust history of rewarding its shareholders, having issued 29 dividends since July 2001. The latest payout in the past year was ₹13.75 per share, resulting in a dividend yield of 2.63%. The company also has a solid track record of bonus shares, the most recent being a 1:2 ratio in July 2016.
• Q2 FY25 Performance: In the second quarter of FY25, ITC reported gross revenue of ₹20,360 crores, marking a 16.0% year-over-year increase. Profit Before Tax (PBT) was ₹6,755 crores, with Profit After Tax (PAT) at ₹5,078 crores and earnings per share (EPS) of ₹4.06.
• Future Outlook: Expectations of favorable crop yields and easing inflation are likely to boost consumption demand. Analysts view the recent price correction as a prime buying opportunity. The overall sentiment remains positive, with target prices around ₹530 and ₹594 being recommended by various brokerages.
• Business Diversification: ITC operates across multiple sectors, including cigarettes, FMCG, hotels, agribusiness, and paperboards, which helps to mitigate risks and strengthen its market position.

In summary, ITC appears to be a promising investment option with solid fundamentals, a history of shareholder returns, and a positive growth outlook, particularly in light of the festive season.

Disclaimer: This report is for informational purposes only and should not be considered as financial advice or a recommendation to buy or sell any securities. Investments in stocks are subject to market risks, and past performance is not indicative of future results. Investors should conduct their own research and consult with a qualified financial advisor before making investment decisions. The author and publisher do not guarantee the accuracy or completeness of the information provided and are not liable for any losses incurred from investments based on this report.