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 ITC’s investor meet highlighted growth imperative led by broad based growth across business segments enabled by innovation, efficient and agile supply chain, digital/smart ecosystem and cost optimisation as per a report by Amnish Aggarwal -- Head of Research, Prabhudas Lilladher.

ITC continues to innovate and improve GTM initiatives even as cigarette business growth seems to be a function of taxation policy. ITC is aiming for 80-100bps margin expansion in New FMCG business led by premiumisation, scale and cost optimisation, the report said.

Hotels business is in for strong growth with huge scope to grow and rising ARR/occupancy.

“We found Food Tech and Nicotine derivative exports as two exciting businesses with a scope to create strong moats in long term. We continue to believe that FMCG and IT Services will create huge value for shareholders over the years”, the report said.

“We remain positive innovation and digitisation led strategy with sustained growth and 100% jump in ROCE of non-cigarette businesses and overall Rs 947bn cash generation in last 10 years,” the report said.

ITC trades at 24.9/22.9x FY25/FY26 EPS with 3% dividend yield and 9.7% EPS CAGR over FY23-26. Maintain Accumulate with SOTP based target price of Rs 492, it added.

Urban remains resilient however rural is still under pressure although some green shoots are emerging. Next two quarters to see better trajectory. ITC is targeting 80bps-100bps margin improvement every year led by premiumisation (30/40bps), scale (20bps), 100bps over time in ICML, freight and cost optimisation, the report said.

In foods, new experience business/sunrise/noodles continue to see market share gain with current market share being 60%/53%(north east and WB)/20%. ITC sees huge opportunity in premium food product led by protein bar, yoga bar will be distributed with existing distributors network.