After a 5% rally in 2 days, ITC earns a downgrade. Here's why
Emkay Global downgraded ITC to 'add' at Rs 460 citing near-term pressures like margin stress. Analysts' recommendations from Trendlyne data show 31 buy, 2 hold, and 1 sell. ITC shares yielded negative returns recently.
After a 5% rally in 2 days amid the election outcome nervousness, ITC has now earned a to ‘add’ from domestic brokerage firm with a target price of Rs 460 as they see some near-term on the company.“We have been positive on due to its better execution and macros supporting its diversified businesses. However, amid the near-term business pressures like margin stress, & , and the slowdown in agri, we have recently downgraded to ADD,” said in its report.
For the , they see after two back-to-back inflationary leaf crop season (last year’s floods in the domestic market drove a surge while this year it is due to global supply pressures), leading to 60 bps YoY likely compression in margin for FY25, which is likely to recover in FY26 (on hopes of a better crop season).
Additionally, the brokerage firm believes that the pressure is likely to exist from the surge in competition, and expectations of higher tax hike in the Union Budget (to fund populist measures).
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Out of 34 analysts, 31 recommend buying the ITC stock while 2 advise to hold and 1 recommends selling the same, as per data.
Recently, the shares of ITC have yielded overall negative returns for the investors as in the last one year, the stock has dipped by nearly 2% while in the current calendar year, it has declined by 7%.
The shares of ITC were trading flat on BSE at Rs 433.80 around 12 pm today.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of )
Source: Stocks-Markets-Economic Times
