ITC shares gain modestly after Q2 results; analysts split on outlook
ITC has fallen nearly 35% over the past year compared to a decline of about 8% for the Nifty 50, and is down roughly 26% year-to-date
ITC Limited's shares experienced a modest increase of 0.84 per cent on Tuesday following the release of their second-quarter results. The stock opened at ₹269.05 and reached a high of ₹270.60 before settling at ₹268.65, with a trading volume of over 1.8 crore shares. Over the past year, ITC has underperformed, falling nearly 35 per cent compared to an 8 per cent decline in the Nifty 50 and a 26 per cent year-to-date drop.
The stock hit a 52-week low of ₹252.80 in October and is far from its 52-week high of ₹421.65. Analysts have offered mixed opinions on ITC's outlook. HDFC Securities maintained an ADD rating with a target price of ₹300, praising the non-cigarette performance while noting that cigarette profitability depends on a volume increase.
JM Financial also retained an ADD rating but lowered its target price to ₹305 from ₹320, citing sector de-rating, though it highlighted the 5 per cent dividend yield. Motilal Oswal rated ITC Neutral with a target of ₹285, citing ongoing earnings pressure from the cigarette segment offsetting recovery in FMCG and paper divisions.
The company's Q2FY27 results showed a 3.9 per cent year-on-year increase in consolidated revenue to ₹20,269 crore, but EBITDA fell 15.7 per cent to ₹5,645 crore due to a 21 per cent drop in cigarette net sales following significant excise duty and GST hikes. The FMCG segment performed well, with revenue up 19 per cent and EBIT increasing 31 per cent.
ITC's board approved merging Sproutlife Foods Private Limited, the maker of the health brand Yoga Bar, into ITC, simplifying their corporate structure and consolidating financial resources.
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