ITC Share Price Target: Domestic brokerage firm Sharekhan has reaffirmed its ‘buy’ recommendation for FMCG giant ITC, raising the target price from ₹550 to ₹595 per share. Sharekhan believes ITC is entering a phase of stable earnings growth across its diverse business segments, from cigarettes to hotels.
Steady Growth ITC Share Price Target
Sharekhan anticipates that ITC’s cigarette business will experience stable volume growth in the upcoming quarters, particularly due to no changes in cigarette tax rates in the Union Budget 2024. The stability in tax policy has also enabled ITC to increase its share in the illicit cigarette market. The report projects a growth in cigarette sales volumes of 4-5% in the near future, barring any major tax changes.
ITC Share Price Target Outlook
ITC Limited stands as India’s leading manufacturer and seller of cigarettes, while also diversifying into sectors like FMCG, paper and packaging, agribusiness, and hospitality. The company’s products are available in over 6 million retail outlets across India and are exported to more than 90 countries. Approximately 78% of its revenue is generated domestically, with the remainder coming from international markets. ITC holds over 80% of the organized cigarette market share in India.
The company’s revenue streams are diversified: 40% comes from cigarettes, 27% from other FMCG offerings, 21% from agribusiness, 11% from paper and packaging, and 2% from the hotel sector. Over the past year, ITC’s stock has seen a remarkable increase of 34.84%, with a 65% rise over the last five years. We will provide a comprehensive analysis of the expected share price trends for ITC in the upcoming years.
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ITC Share Price Target
| Year | Share Price Target |
| 2023 | x |
| 2024 | ₹ 505.82 |
| 2025 | ₹ 619.06 |
| 2026 | ₹ 750.89 |
| 2027 | ₹ 806.98 |
| 2028 | ₹ 902.23 |
| 2029 | ₹ 1,000.56 |
| 2030 | ₹ 1,180.77 |
| 2035 | ₹ 1,502.12 |
Strong Recovery Expected in ITC’s Non-Cigarette FMCG Segment
ITC’s management is focused on boosting FMCG margins by 80-100 basis points annually. This will come from a combination of revenue mix improvements (30-40 bps), economies of scale (20 bps), and cost optimization (30 bps). Sharekhan forecasts a 15% annual growth rate for the FMCG business from FY2024 to FY2027, along with a 410 basis points increase in EBITDA margins during FY2020-2024.
Improvement in ITC’s Paperboard, Paper, and Packaging Segment
Sharekhan notes that ITC’s paperboard, paper, and packaging (PPP) business has reached its lowest point and is expected to gradually improve in the coming quarters. Analysts value ITC’s stock at 24x for FY2026E and 22x for FY2027E, which is at a discount compared to its larger competitors.
Risk Factors: Tax and Rural Demand
Sharekhan warns that a significant increase in cigarette tax rates or a decline in consumer demand, particularly in rural areas, could adversely affect the company’s earnings forecasts in the near term.
Disclaimer: Investments in the stock market come with risks. Please conduct your own research or consult a financial advisor before making investment decisions. This article aims to inform the public, investors, and traders to enhance their understanding.