Investors rejoiced on social media and WhatsApp groups as ITC shares spiked over 7 per cent on Thursday morning. The scrip traded at Rs 232, up 7.48 per cent as of 9.45 am.
Analysts said it was difficult to pinpoint the reason behind the sudden jump. However, Deepak Jasani, Head of Research at HDFC Securities, said this was likely due to the expectation of restructuring of the company that might be announced next month.
ETMarkets could not immediately verify speculations doing the rounds in the market.
There have been growing calls from the trading community that various units of the company should be demerged, especially those that consume a lot of cash, like its hotel business. Calls of share buyback and more proactive management actions are among the demands.
ITC meme doing the rounds on social media platforms
From celebrated fund managers to retail traders, the opinion of the market has been divided on the stock. Some believe the stock is suffering due to low margins from its FMCG business and losses from its hotel unit, others claim it is a sleeping giant that will certainly wake up one day.
The analyst community, however, has been largely bullish on the counter. It is a consensus buy from 34 analysts. Only one analyst says you should sell the stock.
The Refinitiv database shows the median price target on the stock is around Rs 250, meaning a potential upside of about 11 per cent over the last trading price. The highest target price puts the stock’s fair value at Rs 345 and the lower target puts it at Rs 198.
The consensus of nine analysts that Refinitiv analyses expects ITC’s earnings per share at Rs 12.68 in FY22 and Rs 14.13 in FY23. This is against reported EPS of Rs 10.70 in FY21. Similarly, they expect FY23 revenue to rise to Rs 59,681 crore from the current Rs 49,273 crore.
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