The Most Valuable FMCG Company – ITC – Beats HUL
On Friday, it was noticed that the ITC was riding on strong Q1 results. Hence, it surged over 5 per cent to pip Hindustan Unilever as the most valuable FMCG Company in India.
It was also reported that the company was occupying the forth position in the list of most valued listed companies.
Today, on the BSE, the scrip rose 5.20 per cent to hit a 52-week high of Rs 302.10. On the other hand, the mid-cap of the ITC stood at Rs 3.8 lakh crore, which was noticeably higher than HUL as HUL stood at Rs 3.6 lakh crore.
It was also reported that the ITC stock is trading at 50 per cent discount to HUL’s valuations. They largely are positive to neutral on the scrip. The price target of CLSA is at Rs 390 on the stock.
On Friday, the ITC is trading at 24.6 times FY20E EPS versus HUL’s 48.2 times FY20E EPS. This 50 per cent discount is at the higher end and during good times, it has shrunk to 20 per cent.
On the other side of the story, it is found that the cigarette is contributing ~85% to EBIT, reliance on regulated business remains high. For this reason, it is suggested to hold ITC on SOTP on FY20E to arrive at a target price of Rs 328, as per the experienced analysts.
Analysts are expecting the net profit of Rs 2,805 core for the quarter under review for ITC.