- By Vaamanaa Sethi
- Thu, 20 Jul 2023 04:46 PM (IST)
- Source:JND
ITC has become the seventh Indian listed company to cross the Rs 6 lakh crore market capitalisation for the first time after its shares ballooned by 48% this year so far. ITC stock had hit a record high of Rs 491 per share at close on Thursday, gained more than 2% intraday, against its previous close at Rs 478 on Wednesday.
Reliance Industries, Tata Consultancy Services, HDFC Bank, ICICI Bank, Hindustan Unilever and Infosys are the other six companies to achieve this milestone.
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ITC has shown an impressive performance across all its business segments, including cigarette, FMCG, paper and hotels. According to a Moneycontrol report, investors view ITC as an excellent investment option because of its stable cash flow and consistent dividend payouts.
A double-digit growth and strong operational performance was reported in its cigarette volume, meanwhile, its hotel segment also did exceptionally well, further contributing to stronger results.
Over the past five years, the taxation (GST & Excise) on cigarettes has remained relatively stable. Furthermore, the implementation of deterrent measures against illicit and contraband cigarettes has contributed to significant volume growth of approximately 19% in FY23, an analyst was quoted as saying by Moneycontrol.
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"In our base case, we forecast c.10 percent annual growth in Cigarette EBIT over FY23-25E and a c.12 percent growth in FMCG revenues. Cigarette margins are expected to expand by 120bps over FY23-25E as an increase in consumer prices should more than offset tax hikes. We use SOTP methodology to value the ITC cigarette business at 27x Mar-25 earnings, new FMCG at 5x Mar-25 sales, Agri and paperboard businesses at 15x Mar-25 EPS, and hotels at 18x Mar-25 EV/ Ebitda", said Jefferies India in a note to investors.