ITC stock slips 7% in two days following approval for hotels business demerger. Discover analysts opinions on the market impact and implications of this development at news18.com
“ITC FMCG business has become large and it is free cash flow positive. Tobacco business volume growth is not bad at all, given that they are getting market share from the illicit market. Hotel business is in a mini bull run and paper business has never had it so good.”
ITC s decision to demerge its hotel business is not likely to be a game-changer for shareholders, says Amnish Aggarwal, Head-Research at Prabhudas Lilladher. The capital-intensive hotels business only accounts for around 5% of ITC s value, with 80% attributable to its cigarettes and FMCG operations. While some expectations were built into the stock price in anticipation of the move, ITC shareholders will not see a significant value unlocking.
ITC share price target: Emkay said ITC’s valuation re-rating has been a factor of the conducive setting in the cigarettes business and profitable growth across other segments. It values ITC stock at Rs 525.
ITC share price: The counter's 14-day relative strength index (RSI) came at 62.10. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-equity (P/E) ratio of 29.15. It has a price-to-book (P/B) value of 8.09.