The problem with ITC has been that over the last five years, it has underperformed its peer set right from HUL to Nestle to Britannia to companies which have also underperformed in the last one or two years like Dabur or Marico. On the valuation front ITC could be, 14-15-16 times one year forward while all these companies be anywhere in the range of 40 to 80-85 in terms of their forward price earnings ratios. But what ITC has promised over the last five years about the demerger for the FMCG business, for the food business has never happened. It’s cigarette business has done all the heavy lifting which is considered a sin business and which always is subject to a lot of regulatory overhangs in terms of increasing taxes, has always marred the sentiment of this business.
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