Banger stock: ITC hits fresh 52-week high, gains by 2%; top pick amid Q4 season

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ITC stock, a major player in the FMCG industry, is up for the fourth straight day on Tuesday. The stock received positive feedback from investors, touching a new 52-week high and rising by 2%. ITC is one of the brokerages’ top picks amid FY23 Q4 earnings.

ITC’s stock price increased by $7.40, or 1.90%, to close at $396.10 per share on the BSE. It had earlier in the day reached a new 52-week high of 398.20 per share.

The company’s market cap is at ₹4,92,646.62 crore — rising by ₹9,569.57 crore compared to the previous day’s m-cap of ₹4,83,077.05 crore.

Since April 5th, ITC has experienced rapid growth. Four trading sessions have seen a nearly 5% increase in the stock price.

The company revealed last week that it was selling all of its stock holdings in Espirit Hotels, a joint venture, totaling 4,65,09,200 equity shares with a face value of $10 apiece. This represents 26% of the paid-up share capital held by Espirit Hotels.

Espirit is no longer the company’s JV as a result.

ICICI Direct’s #1 choice for the Q4 earnings season is ITC.

ITC’s revenue is expected to expand by 6.3%, according to the brokerage, with a notable 15.9% increase in cigarette sales. Moreover, ICICI Direct has taken into account a 13% increase in volume for cigarettes in Q4FY23.

As said in the brokerage’s letter “FMCG sales are predicted to increase by 19.1%, driven mostly by robust growth in the food, discretionary, and stationery categories. The hotel industry is predicted to expand 77.8%, driven by post-covid pent-up demand. Given that RM prices have decreased and businesses are making corresponding price concessions, the growth in the paperboard industry is anticipated to diminish. In Q4, the market is anticipated to expand by 7.6%. Due to restrictions on wheat exports, the agribusiness is probably going to experience a 25.4% fall in sales.”

The brokerage also anticipates an increase in operating margins to 35.3% and a 340 bps increase in gross margins. A 17.2% increase in net profit to 4,911.8 crore is anticipated.

ITC has a “Buy” recommendation from the firm with a target price of 450 per share.

Will be closely watched to see if the corporation announces its final dividend for FY23 during the Q4 results announcement. The corporation distributed a 600% cumulative interim dividend to its stockholders in Q3, amounting to $6 per equity share. The corporation distributed a massive 1150% dividend, or $11.5 per share, in FY22.

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