{
  "id": 5763286,
  "title": "ITC’s tobacco business is going cheap but Kotak Institutional Equities thinks market has it wrong",
  "url": "https://urgent.news/2026/09/05/itcs-tobacco-business-is-going-cheap-but-kotak-institutional-equities",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-09-05T10:13:15.000Z",
  "source": {
    "name": "The Economic Times - Top News",
    "slug": "the-economic-times-top-news",
    "url": "https://economictimes.indiatimes.com/markets/stocks/news/itcs-tobacco-business-is-going-cheap-but-kotak-institutional-equities-thinks-market-has-it-wrong/articleshow/133796628.cms"
  },
  "original_language": "en",
  "account": "ITC's tobacco segment appears undervalued by the market, according to Kotak Securities. The broker's reverse-SoTP valuation suggests the tobacco business is worth around 11 times its one-year forward earnings, while the market's current valuation is implied to be just 16 times earnings for the tobacco segment and 30 times EV/EBITDA for the non-tobacco segment. This disparity indicates either a lack of confidence in the tobacco business's future earnings growth or an overvaluation of the non-tobacco segment by the market. Kotak notes that its assumptions for the tobacco segment should provide reassurance to investors who are skeptical of the 11X implied P/E ratio. The brokerage believes that ITC's non-tobacco business could deliver higher profit growth than its peers due to potential growth in key categories and margin expansion opportunities as the business grows. Kotak also suggests that a split of ITC into separate tobacco and non-tobacco entities could unlock significant shareholder value, with the tobacco entity attracting value-focused investors seeking steady growth and high dividends, and the non-tobacco entity appealing to growth-oriented investors and a broader investor base concerned with ESG issues related to the tobacco business.",
  "summary": "Kotak Securities estimates ITC’s tobacco business is valued at just 11X forward earnings, suggesting potential undervaluation. The brokerage sees stronger growth in non-tobacco businesses and believes splitting ITC’s tobacco and non-tobacco operations could unlock significant shareholder value.",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}