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Most analysts have maintained a positive view on ITC after the FMCG-to-hotel major reported a net profit at Rs 3,587.20 crore for the third quarter ended December 2020. It had posted a profit of Rs 4,047.87 crore during the October-December period of the previous fiscal.

Shares of the company traded 3.09% down at Rs 219.45 at around 11.50 am (IST). On the other hand, the benchmark BSE Sensex was up 0.34% at 51,708 at around the same time.

Brokerage YES Securities is positive on ITC due to attractive valuations projected at 15 times FY23.

“We see a gradual re‐rating towards 18‐20 times and move towards Rs 270 and beyond,” the brokerage said.

ITC’s revenue from operations came at Rs 14,124.48 crore during the quarter under review. It was Rs 13,307.54 crore in the corresponding period of the previous fiscal.

Axis Capital is also bullish on the company with a price target of Rs 260.

“Cigarette volumes are recovering well, hotels have turned positive operationally (EBITDA break-even on an exit basis; cash break-even for Q3) and FMCG continues to see a structural uptick in revenue or margin. A favourable (and a rare) combination of low volume base and benign taxation in FY22 bodes well for a strong/ accelerated cigarette volume recovery. Inexpensive valuation and robust dividend/FCF yield of over 5% lend additional comfort,” Axis Capital said in a report.

YES Securities further added that despite a muted FY21, FY22 should see a strong recovery with cigarettes volumes bouncing back and FMCG sustaining a strong growth trajectory coupled with improving margins.

Meanwhile, ITC said its results for the quarter are not comparable to the year-ago period as it also includes the revenue of Sunrise Foods, which it had acquired on July 27, 2020. “Accordingly, the results of the quarter and nine months ended 31.12.2020 are not comparable with previous periods,” it said. The firm’s total expenses were at Rs 9,765.56 crore in Q3 FY 2020-21.

During the quarter, revenue from ITC’s total FMCG business was Rs 9,843.78 crore. It was Rs 9,265.31 crore in the year-ago period. Revenue from its cigarettes business came in at Rs 6,091.17 crore, compared to Rs 5,944.86 crore earlier.

Emkay Global Financial Services also has ‘Buy’ call on ITC with a price target of Rs 265. “Further recovery in cigarettes or other divisions can lead to an upgrade in FY22/23 forecasts. ITC’s increased aggression on innovations and cost efficiencies are encouraging. Valuations at 16 times FY23E provide attractive upsides,” the brokerage said.