ITC posts Q4 up 8 pct, brokers raise target on cigarette rebound

Indian conglomerate ITC shares rallied 7.5 % intraday on Monday after the company shared its fourth quarter earnings performance.

Majority of brokerages maintained their rating on the stock but raised target price, citing revival of cigarette business.Credit Suisse increased target price to Rs. 385 from Rs. 370 retaining outperformance rating as the company recorded strongest EBITDA growth in seven quarters.

According to the brokerage, only overhang now is the uncertainty with goods and service tax (GST). JP Morgan has also maintained overweight with increased target at Rs. 370, saying the stock is reasonably valued at 24 times FY17 and 21 times FY18.

The FMCG sector company on last Friday beat the analysts` expectations on revenue front while profit and operational performance was in-line.Profit grew by 5.7 % and revenue rose 9.4 % compared to year-ago period.

The company's cigarette business showed 10.2 % year-on-year growth with EBIT rising 11.5 % and moderate decline in volume.

Meanwhile, the company announced bonus of one share for every two shares held.