Report for ITC

Buy ITC, target of Rs 258:

IndiaInfoline has maintained its buy rating on ITC with a target price of Rs 258 in its May 26, 2008 research report. "ITC recorded 14.7% yoy growth in revenues at Rs 139.5 billion slightly below our expectation of Rs 140 billion during FY08 led by 7.7% yoy growth at Rs 138 billion in the core cigarettes segment. We believe ITC to have recorded a flat growth (or a decline of 1%) in cigarette volumes during FY08. The non-cigarette businesses recorded 18.9% yoy growth at Rs 98.4 billion driven by strong 48.6% yoy growth in FMCG [led by branded packaged foods - 57%, biscuits – 53%, confectionary – 40%, lifestyle retailing – domestic 26%, exports 17%], 10.5% yoy in agri, 12.6% yoy in paper and packaging and 11.6% yoy rise in hotels segment. The leaf tobacco exports recorded a new high in tobacco exports for the third consecutive year growing by 21% yoy in value terms and 27% yoy in volume terms (at 62mn kgs)."