Investors rejoiced on social media and WhatsApp groups as ITC shares spiked over 7 per cent on Thursday morning. The scrip traded at Rs 232, up 7.48 as of 9.45 am.
Analysts said it was difficult to pinpoint the reason behind the sudden jump. However, Deepak Jasani, Head of Research at HDFC Securities, said it is likely on the expectation of restructuring of the company that may be announced next month.
ETMarkets could not immediately verify speculations doing the rounds in the market.
There have been growing calls from the market community that various units of the company should be demerged, especially those that consume a lot of cash, like its hotel business. Calls of share buyback and more proactive management actions are among the demands.
From celebrated fund managers to retail traders, the opinion of the market has been divided on the stock. Some believe the stock is suffering due to low margins from its FMCG business and losses from its hotel unit. Whereas others believe it is a sleeping giant that will certainly wake up one day.
The analyst community, however, has been largely bullish on the counter. It is a consensus ‘buy’ from 34 analysts. Only one analyst believes you should sell the stock.
The Refinitiv database shows the median price target on the stock is around Rs 250, meaning a potential upside of about 11 per cent last trading price. The highest target price puts the stock’s fair value at Rs 345 and the lower target puts it at Rs 198.
The consensus of nine analysts that Refinitiv analyses, expects ITC’s earnings per share at Rs 12.68 in FY22 and Rs 14.13 in FY23. This is against reported EPS of Rs 10.70 in FY21. Similarly, they expect FY23 revenue to rise to Rs 59,681 crore from current Rs 49,273 crore.
