Most brokerages stayed bullish on ITC Ltd., expecting the consumer goods makers paperboards, packaging and hotel segments to recover once mobility improves, and on improving volumes for its mainstay cigarette business. But the impact of the goods and services tax on volumes needs to be monitored.
The company saw its cigarette segments revenue rise 6.9% sequentially to Rs 6,508.43 crore in the quarter ended March. Gross profit of the cigarette division rose 6.5% during the period.
The [cigarette] segment saw continued progressive volume recovery to nearly pre-Covid levels. We believe that cigarette volume to have been up by 6-7% year-on-year, Nirmal Bang said in a report.
Better cigarette sales lifted the companys overall bottom line. ITCs total revenue, too, increased over the preceding three months.
Shares of ITC, however, fell as much as 2% in early trade on Wednesday to Rs 210.85 apiece, compared with NSE Nifty 50 indexs 0.5% drop. Of the 38 analysts tracking the company, 30 have a buy rating, seven recommend a hold and one suggests a sell, according to Bloomberg data. The average of the consensus price targets implies an upside of 18.7%.