ITC shares hit fresh 52-week high after strong Q2 performance across segments; brokerages revise price targets

Shares of ITC on Friday: Brokerages have increased the target price on ITC after good Q2 show

Shares of ITC on Friday: ITC's revenue from the FMCG-others segment was also up 21.03 per cent

Shares of ITC on Friday, October 21, hit a fresh 52-week high of Rs 353.20 on account of strong second quarter performance across segments. At 10:10 AM, ITC stock price traded at Rs 350 on NSE, gaining half a percent. The stock of tobacco-to-hotels major has rallied over 55 per cent in 2022 so far and is one of the best Nifty performers this year.

ITC reported a 24.08 per cent increase in consolidated net profit at Rs 4,670.32 crore in the July-September quarter, led by a strong performance across segments including cigarettes and agriculture business. The company had posted a net profit of Rs 3,763.73 crore during the same quarter last fiscal.

The Kolkata headquartered company's revenue from operations rose 25.35 per cent to Rs 18,608 crore in the second quarter of the current fiscal compared to Rs 14,844.38 crore in the year-ago period. ITC's total expenses were at Rs 12,823.87 crore, up 25 per cent in Q2/FY 2022-23, as against Rs 10,258.26 crore in the corresponding quarter.

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"Strong performance continues across segments," said the multi-conglomerate in its earnings statement.

Brokerages have increased the target price on ITC after good Q2 show

ITC (CMP: 350)

Brokerages

New Rating

Old Rating

New Target

Old Target

CLSA

Outperform

375

355

Goldman Sachs

Buy

410

390

Jefferies

Buy

415

360

JP Morgan

Overweight

380

350

Morgan Stanley

Overweight

374

330

ITC Stock Price At Rs 500?

According to Zee Business panellist Jay Thakkar, the stock is fundamentally strong and fresh breakout is above Rs 360-370. ITC stock price, according to him, would be Rs 535 once it tops Rs 360-370.

ITC Share Price Chart

During the quarter, revenue from the total FMCG segment, which also includes cigarettes, was up 22.07 per cent to Rs 12,529.64 crore. It was Rs 10,263.67 crore in Q2/FY22. Revenue from the cigarette business was up 22.75 per cent to Rs 7,635.38 crore in the July-September quarter of this fiscal. It was Rs 6,219.84 crore in the corresponding quarter last fiscal.

ITC's revenue from the FMCG-others segment was also up 21.03 per cent to Rs 4,894.26 crore in Q2/FY23 as against Rs 4,043.83 crore in the year-ago period. ITC's FMCG-others segment consists of branded packaged foods such as staples, snacks, meals, dairy and beverages, confections, apparel, education and stationery products, personal care products, safety matches and incense sticks.

"The FMCG businesses witnessed strong growth across channels and markets (both urban and rural) driven by a ramp-up in outlet coverage, enhanced penetration and last mile execution," according to the company.

Revenue from ITC's Hotels segment was up 80.16 per cent to Rs 560.37 crore in comparison to a lower base of the pandemic-impacted corresponding quarter. It was Rs 311.04 crore in Q2/FY22. ITC's agribusiness was up 43.06 per cent to Rs 4,038.74 crore during the period under. It was Rs 2,823.07 crore in the July-September quarter of the last fiscal.

ITC's revenue from 'paperboards, paper and packaging' segment was at Rs 2,287.58 crore, up 25 per cent from Rs 1,829.72 crore earlier. Revenue from other segments, which includes its information technology services, branded residences etc, was up 8.88 per cent to Rs 801.69 crore as against Rs 736.27 crore of Q2/FY22.

ITC stock has delivered a whopping return of more than 55% to investors in 2022 so far. On January 2, the first trading day of the year, ITC share price was Rs 219.10. ITC share price has since then added over Rs 129 apiece, resulting in wealth gains for investors.

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