ITC shares slip into the red as cigarette maker trades ex-dividend

ITC shares declined on Wednesday as the stock of the cigarettes-to-hotels conglomerate traded ex-dividend. ITC shares declined by Rs 7.9 or two per cent to Rs 378.7 apiece at the weakest level of the day on BSE. 

Despite the fall, the ITC stock traded within Rs 10 of its all-time high of Rs 388.2 apiece, touched on February 6. 

ITC Dividend payout

The ITC dividend was announced by the company this month, with a record date of February 15. 

“The Board of Directors declared Interim Dividend of Rs 6 per Ordinary Share of Rs 1 each for the financial year ending on 31st March 2023,” ITC said while reporting its financial results for the quarter ended December 2022.

ITC said the dividend will be paid between March 3 and March 5. 

Brokerage's View on ITC

Phillip Capital maintained a high conviction ‘buy’ rating on ITC with a target price of Rs 475 per share, implying 23 per cent upside potential from Tuesday’s closing price. The brokerage upgraded its target multiple for ITC from 22 times to 24 times, a 10 per cent premium to its 10-year average, given the company's clear visibility on the profitability front and volume for the next 12 months.

“We expect cigarette volume growth of seven per cent in FY24 amid a minimal increase in tax incidence, which provides clear visibility for next 12 months and market share gains from contraband/illegal segment on account of increased surveillance,” said Vishal Gutka, an analyst at Philip Capital. 

ITC Q3 Results

The FMCG major reported a 23 per cent year-on-year rise in consolidated net profit to Rs 5,070 crore for the October-December period, mainly driven growth momentum across operating segments. Its revenue grew 3.6 per cent to Rs 19,021 crore.

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