3 Bonus, 1:10 Split, 625% Dividend: FMCG ITC Is Short-Term Money Making Stock, 31 Analysts Give Buy, RS 470 TP

ITC Ltd, one of the A-class blue-chip stocks, is worth buying. ITC is not only the largest FMCG stock in terms of market share, but it is also cheap below Rs 450, and is undervalued with long-term target levels seen to be around Rs 500 to Rs 560. But there is a chance for short-term money-making opportunities in ITC as well! Brokerage Avdhut Bagkar, Derivatives & Technical Analyst, StoxBox believes ITC has a short-term upside target of Rs 470, once it breaches past Rs 430 levels.

ITC Share Price: {image- itc600-1714894436.jpg www.goodreturns.in}

This FMCG stock ended at Rs 436.25 apiece, down by 0.65% on BSE with a market cap of Rs 5,44,645.97 crore. In the trading week from April 29 to May 3, ITC shares ended lower by 1%, while YTD, the stock is down by 6.6%.

In a year, ITC shares have gained just 2%. Last year, ITC was the top-performing FMCG stock, outrunning its peers like HUL. While its 5-year performance is of gains over 46.54%. Moreover, ITC's all-time gain is a whopping 8,039% on BSE.

The stock's 52-week high and low are at Rs 499.60 and Rs 399.30 apiece respectively. As per BSE data, ITC's price-to-equity ratio is at 26.57%, which is healthy. Further, its return on equity (RoE) is also steady at 30.47%. ITC's earnings per share is at Rs 16.42.

ITC Short-Term Target Price:

As per Trendlyne data, the consensus recommendation from 34 analysts for ITC Ltd. is BUY. Of the total, 21 analysts have recommended 'STRONG BUY'on ITC, while 10 analysts suggested just 'BUY'. Of the rest, 2 analysts give 'HOLD', and only 1 analyst has given 'SELL' on ITC shares. Accordingly, as per the data, the short term 1-year average target price for ITC is of Rs 502, hinting a potential 15% upside ahead.

Meanwhile, although Avdhut Bagkar, Derivatives & Technical Analyst, StoxBox did npt give any recommendations like buy or sell. But he said, ITC stock "is attempting to absorb all the selling emerging in the range of 442-437 levels. Once this range is conquered, the breakout would see a short-term upside to 470 level."

Bagkar added, "The current trend indicates a move in the same direction, as per the set-up of daily chart. Unless a breach of 430 appears, the trend to follow upward bias. Relative strenth index had yet to enter the overbought territory, providing room for further upside. The bias favour bulls and decisive breakout would see more addition of longs."

ITC Next Big Event:

The latest sentiment driver for ITC will be its Q4 earnings for FY24 which will be announced later in May month.

While ITC is planning a scheme of arrangement with its ITC Hotels business. As per the regulatory filing, on April 24, ITC announced that as directed by the Hon'ble National Company Law Tribunal, Kolkata Bench, vide Order dated 22nd April 2024 which was received by us on April 24, a Meeting of the Ordinary Shareholders of the Company will be convened on Thursday, 6th June 2024 at 10.30 a.m. (IST) through electronic mode to consider, and if thought fit, approve the proposed Scheme of Arrangement amongst ITC Limited and ITC Hotels Limited and their respective shareholders and creditors.

ITC Corporate Affairs:

Dividend: In 2024, ITC turned ex-dividend earlier for an interim dividend of Rs 6.25 per share or 625% having a face value of Re 1 each for the financial year ending on 31st March 2024. As per Trendlyne data, since July 2001, ITC has delivered up to 28 dividends to its investors. In the last 12 months, ITC has paid up to Rs 15.75 per share dividend.

Stock Splits: Meanwhile, ITC Ltd split once in the ratio of 1:10 in September 2005. ITC split its 1 equity share into ten equity shares. The face value was trimmed to Re 1 from Rs 10, hence, a stock split ratio of 1:10.

Bonus Shares: The first bonus issuance was in September 2005, for a 1-to-2 ratio. This meant that ITC awarded 1 new bonus share on the existing two equity shares. ITC further declared a 1:1 bonus issue in August 2010, and a 1:2 ratio in July 2016.

ITC is the biggest cigarette & second largest FMCG company in India with ~80% of the market share in cigarettes & presence in staples, biscuits, noodles, snacks, chocolate, dairy products & personal care products. The company is also present in paperboard, printing & packaging business, agri & hotels businesses.