ITC share price target 2022, 2023, 2024, 2025, and 2030: In this article, you will learn about ITC share price target 2022, 2023, 2024, 2025, and 2030, along with the fundamentals and financials of the company.
For every investor, it is important to know about the company in which they are investing, to get the confidence to hold the stock for the long term. To make it clear for you, in this article we have mentioned ITC share price target 2022, 2023, 2024, 2025, and 2030, along with the fundamentals of the company.
ITC Company Profile
Initially known as the Imperial tobacco company. ITC was incorporated in 1910, with its first office in Kolkata. Later in 1913, the company launched its state-of-the-art tobacco factory in Banglore. On its 16th birthday, ITC bought land in Kolkata for a new office to mark the beginning of an eventful journey into India’s future. Today, the office is known as Virginia house, one of Kolkata’s most important landmarks. As of mid-2020, ITC’s tobacco business contributed around 74% to its profit.
In 1925, they entered into packaging and printing business. In 1953, ITC acquired the Lithographic printing business of Printers limited.
In 1975, they entered into the hospitality sector. In 1994, hotels under the company were transferred into the listed subsidiary company ITC hotels limited and In 2000, they stepped into the clothing, stationery products & gifting business.
ITC Share Price Target: Overview of ITC Business
ITC has 13 businesses in 5 segments, launched over 120 new products in the financial year 2020-21, ITC has a presence in more than 100 countries and the FMCG products of ITC are available in 6 million retail outlets, ITC’s products reach over 150 million Indian households.
Most of the revenue and profits of ITC are from the tobacco segment. In India 10% of the tobacco is only legal consumption, which makes India the fourth largest market for illegal tobacco consumption, it leads to a loss of revenue of 13,000 crores to the Indian government.
Illegal Cigarettes are the biggest competitors for ITC. Because they don’t pay any taxes, which results in low cost. Every year the consumption of illegal cigarettes is increasing, whereas legal cigarettes consumption is falling.
The reason for this is, the government of India is continuously increasing the taxes on cigarettes, which leads to an increase in the price of cigarettes so that smokers will stop smoking. But what happening is smokers are moving towards illegal cigarettes.
In the stationery market, ITC has a 25% market share under the brand name Classmate.
ITC has its presence in businesses like Cigarette, FMCG, Agri, Paperboards and packaging, Hotels, and Infotech.
Brand Leadership of ITC
- Aashirvaad is no.1 brand in aata.
- Yippee is no.2 in noodles.
- Bingo is no.1 in the bridges segments of snack foods and no.2 overall in snacks & potato chips.
- Sunfeast is no.1 in the cream biscuit segment.
- Savlon is no.1 in surface sidinfectant spary.
- Classmate is no.1 in notebooks.
- Fiama is no.2 in liquid bodaywash category.
- Mangaldeep is no.2 in Aggarbattis.
- Engage is no.2 in deodorants.
ITC Share Price Target 2022: Target Price Rs.280 by Sharekhan
Sharekhan has a buy call on ITC with a target price of Rs.280. The time period given by Sharekhan is one year when ITC can reach the given target. The report was released by Sharekhan on 14 December 2021.
Sharekhan take on ITC Share Price Target 2022
ITC eyes double-digit revenue growth and higher PAT growth in the medium term with sustained margin expansion riding on six core growth strategies of leveraging on institutional strengths, innovation, digitalization, cost optimization, sustainability, and creating a strong talent base.
Capex of Rs. 10,000 crore has been lined up over three years of which 35-40% will be ploughed into the FMCG business. Hotel business would stay asset-light and ITC would raise investments in digitalization and inorganic initiatives in the medium-term.
Management is committed to restructuring the hotel business after an overall recovery while it will evaluate unlocking value in the infotech and FMCG business once it attains scale. However, there is no stated timeline for the same. With strong cash flow generation, ITC’s dividend payout would stay at 80-85%.
Key Risks for ITC
Any increase in taxes on cigarettes or government implementing policies to curb tobacco products consumption or any disruption in consumer demand due to frequent lockdowns would act as a key risk to the earnings estimates.
ITC Outlook and Valuation by Sharekhan
The domestic cigarettes industry is affected by a sustained increase in taxes and regulatory regime along with a sharp increase in illegal trade in recent years, especially at the premium end, which continues to pose significant challenges to the legal cigarette industry in the country. Though cigarette was skipped from increased taxes in Union Budget, there is a sustained risk of regulatory hurdles implemented to curb tobacco products consumption.
On the other hand, the outlook for the FMCG industry in India is positive as lower capita consumption, the emergence of new categories, and improving demographics provide enough scope for FCMG companies to achieve sustainable revenue growth in the medium to long run.
ITC Share Price Target 2022: Target Price Rs.250 by ICICI Direct
ICICI Direct has a buy call on ITC with a target price of Rs.250. The time period given by ICICI direct is one year when ITC can reach the given target.
What Should Investors do?
ITC’s share price has given near-zero returns in the last five years (from Rs.225 in December 2016 to 225 in December 2021).
ICICI direct continues to maintain a hold rating on the ITC.
Key Triggers for Future Price Performance
FMCG business growing at a sustained pace with continuous improvement in margins. The opportunity size of the foods portfolio is large.
Duties & taxes on cigarettes to remain stable given the increasing prevalence of illicit & contraband cigarettes.
Strong growth expected in paperboard business with strong demand from user industry after Covid-19 recovery.
ICICI Direct take on ITC Share Price Target 2022
ITC is witnessing a recovery in cigarettes volumes & on a full-year basis, FY23 volumes should be at the FY20 levels. ICICI direct believes stable taxation would aid cigarette volume growth, going forward. FMCG business has witnessed continuous improvement in margins over the last four years. With a focus on adjacencies of power brands and scaling up to newer categories, operating margins would improve over the next five years.
ICICI Direct believes that the company would be able to improve FMCG segment operating margins by 150-200 bps every year. Further, the possibility of de-merger of hotels, FMCG & infotech business can add shareholder’s values in the longer run. Though, ICICI Direct remains optimistic on FMCG business growth & margin prospects de-rating of the cigarettes business globally due to the emergence of e-cigarettes poses a greater threat. ICICI Direct maintains a hold rating and revises the target price on the stock to Rs.250.
ITC Share Price Target 2022: Target Price Rs.265 by Edelweiss Securities
Edelweiss Securities has a buy call on ITC with a target price of Rs.265. The time period given by Edelweiss is one year when ITC can reach the given target price.
Edelweiss on ITC
ITC recently acquired a 16% stake in the D2C brand Mother Sparsh. Over the past few years, ITC has scaled up its FMCG acquisitions well (Savlon, Sunrise, Nimyle, B Naturals). Its FMCG business has tied up with Inox Leisure and McDonald’s, which shows its out-of-the-box thinking. ITC has been the most aggressive company in getting approval for PLI in Foods. It has increased the dividend payout and also put Hotels on a low Capex model via management contracts.
The company has also forayed into the breakfast segment with ready-to-cook and ready-to-mix offerings. Overall, ESG-led investing is assuming significance, and ITC is consciously striving to climb up the ESG ladder, which is a very big positive thing for ITC.
ITC Share Price Target 2022: Target Price R.270 by Prabhudas Lilladher
Prabhudas Lilladher has a buy call on ITC with a target price of Rs.270. The time period given by Prabhudas Lilladher is one year when ITC can reach the given target price.
Prabhudas Lilladher Report on ITC
FMCG Portfolio
Presence in 20 food categories. ITC aims to fortifying the core brands viz. Aashirvaad, Sunfeast, Bingo, classmate, Mangaldeep, etc along with addressing adjacencies viz Aashirvaad instant meal. Aashirvaad salt, Sunfeast wonders milk, etc, to leverage Mother Brands even at the state level and launched B natural, Nnimeasy, MasterChef, sunbean, etc to progressively scaling up at PAN India level for future growth.
Aashirvaad
Out of total atta, around 14-15% is the packaged market in India. ITC is looking at bringing more consumers in the branded fold and increasing sales of value-added adjacencies like sugar release control, Atta, value-added atta like Ragi, spices, organic pulses & breakfast solutions. ITC also ventured into dairy (grown 1.6x over last year) products with Milk, paneer, Ghee, and Lassi.
Sunfeast
ITC holds a 26% share in the premium biscuit market maintaining leadership with 1.5x times the largest competitor in Biscuits. Strategy is to differentiate consumer offers to drive growth & cont. focus on long-term premiumization trends.
Savlon
revenues grew 14x while margins increased by 600bps since its acquisition due to change in product mix more into liquid. ITC rapidly innovated its products under savlon brand & added a robust pipeline of new products like Hexa range, surface Disinfectants, Masks & Wipes.
ITC Share Price Target 2022: Target Price Rs.270 by Emkay Global
Emkay Global has a buy call on ITC with a target price of Rs.270. The time period given by Emkay Global is one year when ITC can reach the given target price.
Emkay Global Report on ITC
In FMCG, management plans to fortify the core and leverage adjacencies. Core brands have displayed strong, ahead-of-industry growth in the last 10 years. Aashirvaad Atta grew 5x with an 18% CAGR, cream biscuits saw a 16% CAGR, the Bingo bridges segment reported a 25% CAGR, and Yippe Noodles posted a 42% CAGR.
In personal care, ITC plans to focus on future-facing categories and drive premiumization with innovations driving affordability in premium categories. Savlon and Nimyle have seen strong success after the acquisition.
ITC expects margin improvement to continue over the longer term and expects industry-leading margins across categories, led by manufacturing cost efficiencies, mix improvement, and accretive acquisitions. High inflationary pressures are, however, likely to impact the margin trajectory in the near term.
ITC Share Price Target 2022: Target Price Rs.310 by KRChoksey
KRChoksey has a buy call on ITC with a target price of Rs.310. The time period given by KRChoksey is one year when ITC can reach the given target price.
KRChoksey on ITC Restructuring Plan
Its being quite some time since the demerger news of ITC infotech and FMCG business was heard in the streets. During the analyst meet the management indicated the likely possibility of the demerger in the short term.
ITC hasn’t ruled out the prospect of listing its infotech division and is willing to do everything it takes to maximize value for its non-cigarette FMCG division, which has benefited from institutional synergies. However, the timeline of the demerger is yet to be disclosed.
Further, ITC plans to create an alternative structure for the hotel business in the short to medium term as soon as the industry recovers.
KRChoksey on ITC Capex Plan
Over the next three years, the company would invest INR 100 bn to expand its capacity. The company plans to spend 35 to 40% of its capacity growth budget on adding new lines and improving capabilities in the FMCG business, with the remaining 25-30% going towards expanding capacity in the paperboards business.
The company plans to spend about 10% of its CAPEX on hotels over the next three years, then taper down its expansion as it transitions to an asset-light business.
KRChoksey on ITC’s FMCG Segment
The company is focusing on deepening the penetration and accessibility of its products. In the last five years, the total reach has increased by 1.2x, direct coverage by 1.4x, and stockiest by 6x. The revenue of the segment grew by 1.4x from INR 105 bn in FY17 to INR 150 bn in FY21.
In its foods business, export is a big area of focus, and its four brands are among the Top 20 trusted food brands in India. Its food brands are present in 5.63 mn stores across the country. It also said that it has a 26% market share in the premium biscuit segment.
In the personal care category, it is witnessing a 14% contribution from e-commerce and has a direct-to-consumer reach through Dermafique and Mother Sparsh.
Valuation and View
Resilient business model, strong brand leadership position in the cigarette business, product innovation track record & premiumization drive is helping the company establishing itself as an FMCG major. Despite the ongoing Covid related slowdown, KRChoksey sees recovery signs in recent months and the current valuation is attractive for long-term investors. KRChoksey values ITC shares using a SOTP (sum of the parts) approach implying 10.1x EV/EBITDA on FY24E to Cigarette business; 18.8x EV/EBITDA on Hotel segment; an average 5.5x EV/EBITDA on Agri/Paper business; and 10.2x on EV/Revenue on FMCG segment which yields a target price of INR 310 per share; an upside of 38.4% over the CMP.
ITC Share Price Target 2023
The FMCG-Others Segment delivered a robust performance, with comparable Segment Revenue growing strongly by 15.8% (excluding the Educational and Stationery Products Business which was impacted by the prolonged closure of educational institutions, the Lifestyle Retailing Business due to ongoing restructuring of operations, and the impact of the acquisition of Sunrise Foods Private Limited during the year).
This was driven by a surge in demand for Staples, Convenience Foods, and Health & Hygiene products in the first half of the year and a strong recovery in the discretionary/out-of-home portfolio in the latter half. Profitability of the FMCG Others Segment improved significantly with Segment EBITDA margin expanding by 180 bps on the back of higher operating leverage, enhanced operational efficiencies, product mix enrichment, delayering of operations, reduced distance-to-market, and other structural interventions across the value chain. ITC is has a strong balance sheet and has a lot of cash to build a branded FMCG portfolio, ITC share price target for 2023 is Rs 320.
| ITC Share Price Target 2023 |
| Rs 320 |
ITC Share Price Target 2024
The Agri-Business Segment posted robust growth in revenue driven by opportunities in wheat, rice, and oilseeds, scale up of the value-added portfolio and higher supplies to the Branded Packaged Foods Businesses to support enhanced scale, subdued demand for leaf tobacco in international markets, and adverse business mix, however, weighed on Segment Results. As ITC also has its business in Agri and there are a lot of growth opportunities for ITC in Agri-business, ITC Share Price Target for 2024 is Rs 410.
| ITC Share Price Target 2024 |
| Rs 410 |
ITC Share Price Target 2024
ITC acquired Sunrise Foods Private Limited (Sunrise), a leading player in the branded spices market in the East, in July 2020. The Scheme of amalgamation of Sunrise with your Company (Scheme) was sanctioned by the Honourable National Company Law Tribunal, Kolkata Bench; the Scheme became effective from 1st April 2021 with 27th July 2020 being the Appointed Date. The rationale for the acquisition and the key drivers of value creation have been discussed in detail in the Branded Packaged Foods section of this Report.
Notwithstanding the challenging conditions prevailing during the year, ITC’s FMCG businesses recorded a Segment Revenue of 14728.21 crores representing an increase of 14.7% over the previous year. ITC has a strong brand leadership and portfolio, considering all the factors mentioned above, ITC share price target for 2024 is Rs 480.
| ITC Share Price Target 2024 |
| Rs 480 |
ITC Share Price Target 2025
ITC’s vibrant portfolio of over 25 world-class Indian brands, largely built through an organic growth strategy in a relatively short period of time, represents an annual consumer spend of over 22000 crores. These home-grown, purpose-led Indian brands support the competitiveness of domestic value chains, especially in the Agri space, thereby ensuring the creation and retention of value within the country.
ITC’s FMCG products reach over 150 million households in India. ITC’s FMCG brands have achieved impressive market standing in a relatively short span of time. Today, Aashirvaad is No. 1 in Branded atta, Bingo! is No. 1 in Bridges segment of Snack Foods (No.2 overall in Snacks & Potato Chips), Sunfeast is No. 1 in the Cream Biscuits segment, Classmate is No. 1 in Notebooks, YiPPee! is No. 2 in Noodles. ITC share price target for 2025 is Rs 590.
| ITC Share Price Target 2025 |
| 590 |
ITC Share Price Target 2030
ITC remains focused on rapidly scaling up the FMCG businesses anchored on strong growth platforms and a future-ready portfolio. Towards this, it seeks to fortify its market standing in the existing core operating categories, in many of which it is already a leading player as aforementioned. It is pertinent to note that these categories, which are largely characterized by low household penetration levels and/or low per capita consumption, offer significant headroom for long-term growth.
This is borne out by several analyst reports which highlight that ITC’s total addressable market expansion potential is amongst the highest in the Indian FMCG space. In this context, it is pertinent to note that the Company is well poised to address adjacent growth opportunities by leveraging the 25 powerful mother brands it has established over the years.
Recent examples of such brand extensions include Aashirvaad to dairy, ready meals, salt, and spices; Sunfeast to dairy beverages and cakes; Bingo to namkeens; ITC Master Chef to frozen snacks and cooking pastes; Savlon to surface & clothes disinfectant sprays, sanitizers, masks, etc. Simultaneously, the FMCG businesses continue to make strategic investments in building the ‘new core’ by scaling up nascent categories such as Dairy (Aashirvaad Svasti), Beverages (B Natural), Chocolates (Fabelle, Candyman Fantastik), Coffee (Sunbean), Home Care (Nimyle, Nimwash, Nimeasy) and Skin Care (Dermafique, Charmis).
ITC is also proactively pursuing a value-accretive acquisition, joint venture, and collaboration opportunities in strategic areas towards accelerating growth and value creation. ITC generates more revenue than other FMCG businesses because ITC generates a majority of its revenue from the cigarettes business, if ITC utilizes the cash generated from its cigarettes business to increase the brand portfolio in FMCG, then ITC can become a leader in the FMCG segment, considering all these factors mentioned above, ITC share price target for 2030 is Rs 2,200.
| ITC Share Price Target 2030 |
| Rs 2,200 |
ITC Share Price Target 2022, 2023, 2024, 2025, 2030 Table
| Year | Share Price Target |
|---|---|
| ITC Share Price Target 2022 | Rs 320 |
| ITC Share Price Target 2023 | Rs 410 |
| ITC Share Price Target 2024 | Rs 480 |
| ITC Share Price Target 2025 | Rs 590 |
| ITC Share Price Target 2030 | Rs 2,200 |
Frequently Asked Questions
Is ITC undervalued or overvalued?
ITC is undervalued. The PE of multiple of ITC is just 21, whereas the PE multiple of other FMCG stocks is more than 70, 80, and even 100 for some companies. The average PE of FMCG companies is more than 60, which is three times more than that of ITC.
Is ITC share good for long term?
Yes, ITC is good for the long term. ITC is very strong in terms of fundamentals and financials. ITC is hugely undervalued when compared to its FMCG peers. If the demerger happens then it will be very big positive news for ITC as it unlocks the value of ITC share. Its being quite some time since the demerger news of ITC infotech and FMCG business was heard in the streets. During the analyst meet the management indicated the likely possibility of the demerger in the short term.
Can ITC be a multibagger?
ITC can be a multi-bagger in long term. ITC has a strong portfolio in the FMCG segment and the company is aggressively entering into a new product portfolio with the launch of new products and acquisitions. The only reason why ITC is not rallying is because of its cigarette business, it is considered as a sin business. If the demerger happens then it will unlock the value of ITC.
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