ITC Stock: if you are looking for a good stock like HUL and Reliance Industries and think ITC is one of then but you have lack of knowledge about ITC or have low confidence because of Noise then you must Read this article.
OUR REVIEW ON ITC stock and ITC share price target
First Lets Go through Various Businesses of ITC
A.Cigarettes & Cigars – Insignia, Gold Flake, etc
B. Food – Aashirvaad, Sunfeast, Bingo, Candyman, Yipee etc
C. Personal Care – Vival, Shower to shower, Fiama, Savlon, Engage, etc
D. Education & Stationery – Classmate, Papercraft
E. Lifestyle Retailing – WlS
F. Safety Matches – Aim , Home lites
G. Agarbatti & Dhoop – Mangaldeep
- Top dividend-paying stocks below 50rs.
- How to find multi-bagger stocks?
- Best stocks to Buy 2020?
- How to apply for BUYBACK?
2. Hotels – ITC Maurya, ITC Gardenia, ITC Windsor, ITC Sonar, ITC Royal Bengal, etc etc
3. Paperboards & Speciality papers
4. Packaging – Cartoonboard packing, Flexible packaging, Tobacco packaging, green packaging
5. Agri-Business – Feed Ingredients, Food Grains, Marine products, Processed Fruits, Coffee
6. Information Technology – ITC infotech Ltd
Various other Group companies , Associate companies & Joint ventures ……..
Now i would discuss what’s wrong going with ITC stock.
First of all if we rate fundamentals of company its 9 out of 10
So let’s see what is affecting Company
Cigarettes account more than 40% of Total Revenues of ITC
It accounts for more 75%- 80% profitability of ITC !!
Cigarette is a Sin Good Government always try to levy more & more tax on it !!!
Now with this Corona Pandemic going on It has done more worst for the company
As well as There has been declining volume/revenues in Cigarettes from last 3 yearsss Which is a major concern as major profitability is from cigarettes only !!!
Basically, we can clearly see by Revenues & Profit % How much ITC is dependent on cigarettes !!!
And Also from last 2-3 Years Management is trying to shift into FMCG segments so majority of cash is being shifted to other FMCG products which has really very low margins !!
So here ITC trying to shift as FMCG player rather than Pure cigarettes players
So in this Shifting they are facing some fixed cost which are important at initial stages to improve Quality to build brand to reach maximum people by advertisement
All this factors are affecting margins in other FMCG products…….
All these are the reasons which is affecting performance of ITC in terms of Revenues & profits
So Now Let’s Discuss what Is the Future of Stock Ahead
The Current Quarter was very positive for other FMCG products
Their Revenues , their profits , their margins have increased in a good trend …..
Constant Degrowth in Cigarette segment since 2018 while Growth in Other FMCG segment.
More than 70 New products have been launched in last few months
Personally you would have also used one or the other products of ITC , I am 100% sure you would have been totally satisfied with Quality & Price !!
So Now What on Lies ahead for ITC?
As we can see Company is Looking for diversification in other process so in this process they are facing some big cost which is affecting their Profitability & also they can see some de growth in their important Business But Good Thing they are improving their Other FMCG products as well as their is increase in revenues & profits and margins are also increasing …….
In the Past Even Nestle & HUL faced issue , HUL faced issue this issue during 2003-2007 when Market was during its biggest bull Run yet HUL performance was very bad !!! But See it now This cycle of underperformance is seen in many big corporates but Sooner or later they have risen big !!!!
So this underperformance of ITC has created a value attraction that every investor must look if they are looking to invest for next 5-10 years
Here patience & constant review of stock is the Key to avoid any situation like Yes bank or DHFL ………
Overall We are Still Positive on Stock one must try to accumulate on dips
If on Monday Stock opens like 2-3% negative wait for levels of 150/130/120 & if opens positive above 180 start accumulating few shares
ITC share price target 2021
We give an unimaginable / Hypothetical Target of 500/700++
In upcoming years we may see this stock in levels which one can’t imagine
So start accumulating if your intention is big for next 5-10 years ……….
The best investment during bad times always gives best return.
Disclaimer: myfundamental is responsible for any kind of loss and profit. please consult with your financial advisor before you invest in this company.