In March, ITC stock outperformed its peers
The stock of ITC has finally begun to move. According to analysts, there is more headroom at this counter. Here’s a quick look at how fundamental analysts expect ITC to perform in the coming months.
The stock of cigarette to hotel conglomerate ITC has gained around 19% in March. Outperforming peers such as Hindustan Unilever, which has lost 10% during this period.
Peers such as Godrej Consumer Products, Britannia, Nestle India, Dabur India, and Marico lost 7% to 11% in March. While the Nifty FMCG index has remained mostly flat, the Nifty50 has lost more than 2% month to date (MTD).
Crude-linked derivatives, which are currently experiencing single-digit inflation, are expected to catch up with a two-to-three month lag.
So, what’s going on with ITC?
According to analysts, the company is relatively insulated because it has other verticals. Such as hotels and cigarettes that cushion the blow to its FMCG segment from the sharp increase in input costs.
The government has kept the excise duty on tobacco unchanged in the Union Budget for fiscal 2022-23 (FY23) is also beneficial to ITC, and cigarette volumes are steadily increasing.
Aside from that, the removal of most Covid restrictions following the third wave has resulted in increased mobility, which bodes well for ITC’s hotel business.
ITC’s paper business segment is also expect to perform well. Owing to tight paper supplies in the domestic market and a possible increase in paper exports.
Analysts like Vinay Khattar, head of research at Edelweiss Wealth Research, believe that all pieces are in place for the stock to catch up with the markets.
