Ahead of Q4 results later in the day, ITC shares witnessed buying interest among stock market bulls during early morning deals on Thursday. IT share price today opened upside at Rs 430 apiece levels and went on to hit intraday high of Rs 432.45 per share levels, logging more than one per cent rise against its Wednesday close of Rs 427.60 per share levels.
What to expect ahead of the ITC Q4 Results?
According to stock market experts, the market is expecting strong ITC results as all segments of the company — tobacco, hotels, FMCG, agriculture, etc. — are expected to perform well during January to March 2023 quarter.
Analysts expect ITC to report double-digit growth in profit on a 3-6 per cent rise in sales. The hotel business may do well on strong hotel bookings, the cigarette business may log 13-14 per cent YoY volume growth, but agribusiness may clock a double-digit de-growth. Paperboards, paper & packaging business is seen reporting flattish growth, analysts said.
Domestic brokerage firm Motilal Oswal expects ITC’s EBITDA margin to remain flat sequentially, but expand sharply by 500 bps YoY. ITC’s non-cigarette FMCG business is seen reporting a sales growth of 19.1 per cent led by strong traction in foods, discretionary and stationary categories.
“Hotels segment is estimated to grow 77.8 per cent led by post-Covid pent up demand. The growth in the paperboard segment is expected to moderate given RM prices have declined & companies are taking price cuts accordingly. The segment is likely to grow 7.6 per cent in Q4. Agri business is likely to see a 25.4 per cent sales decline on account of export restriction on wheat,” ICICI Direct said.
Analysts remain cautious over the company’s weaker performing agri business due to the export ban.
ITC Earnings Performance
A study of the ITC stock’s performance in the last 13 quarters shows that the counter has delivered positive returns only 4 times on post-earnings day.
Since calendar year 2020, ITC’s best show post-earnings was in May 2022 when the stock ended 3.43 per cent higher. On the other hand, the worst performance was in January 2020 when it ended almost 7% down.
What Should Investors Do Now?
Giving ‘buy’ tag to ITC shares, Sumeet Bagadia, Executive Director at Choice Broking said, “ITC share price is looking positive on chart pattern. It may go up to Rs 450 apiece levels in near term and one can buy and hold the stock for this Rs 450 near term target maintaining stop loss at Rs 418 per share levels.”
Having jumped over 60 per cent in the last one year to turn into the best Nifty performing stock, ITC witnessed a decent rally recently from Rs 375 to peak out near Rs 433 levels. Since then it has been consolidating for quite some time within the range of Rs 430-417 levels. Stock prices are forming higher top-higher bottom formation followed by positive divergence.
“A decisive move past Rs 435 zone is necessary to trigger a fresh upward move once again for higher targets. One can maintain the near-term support at around Rs 415 zone,” said Vaishali Parekh, Vice President – Technical Research, Prabhudas Lilladher.
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