ITC share price: CLSA, Morgan Stanley, JPMorgan, Macquarie, UBS, Jefferies targets -

Top brokerages and global investment banks have either retained or trimmed their target prices on ITC Ltd following its September quarter results. Among 16 brokerages that have come out with updates so far, 360 One Capital Markets has the highest target price at Rs 440, while Axis Capital's Rs 280 is the lowest target on the FMCG major. ITC's valuations look attractive after the recent correction, but cigarette segment earnings are likely to remain volatile in the near term, analysts said.

Jefferies noted that ITC's cigarette volumes and EBIT continued to decline in Q2, reflecting pressure from sharp tax hikes, even as the management undertook a series of measures to navigate the challenging conditions.

Calibrated price hikes should support a gradual recovery, even as significant tax arbitrage on illicit cigarettes persists, the global investment bank said.

"The operating environment remains uncertain amid geopolitical tensions, elevated crude/input costs, and inflationary pressures. Indian demand, however, remained resilient across rural/urban, though uneven monsoons and El Niño pose risks to agri output and inflation. We trim FY27-29e earnings estimates by 2-3 per cent and maintain our SoTP-based PT at Rs 350. Reiterate Buy," Jefferies said.

Morgan Stanley has an 'Equal-weight' rating on the stock, with a revised target price of Rs 312 from Rs 340 earlier. UBS retained its 'Buy' rating on ITC but cut its target price to Rs 345 from Rs 350. JPMorgan maintained its 'Neutral' rating and target price of Rs 310.

Macquarie also retained its 'Neutral' rating and target price of Rs 300. CLSA maintained its 'Accumulate' rating and raised its target price to Rs 390 from Rs 388 earlier. Nomura said 'Buy' and suggested an unchanged target of Rs 340. Investec said 'Hold' while trimming its target to Rs 294 from Rs 308.

For Emkay Global, ITC's Q2 results were slightly above estimates, while cigarette business performance was largely in line.

It said revenue grew 2 per cent year-on-year (YoY), beating estimates by 5 per cent, on strong growth in FMCG Others and Agri. Cigarette volumes fell by a high single-digit YoY, in line with estimates, while the 27 per cent decline in EBIT was slightly better than Emkay's estimate.

Going ahead, the brokerage expects both cigarette volume decline and EBIT fall to gradually ease in H2, as demand normalises and the full impact of price hikes flows through.

"While the stock seems attractive at current valuation, we think the weak cigarette volume growth recovery, uncertainty regarding the extent and timing of future price hikes, and upcoming union budget will remain a stock overhang. We retain ADD on ITC while cutting SOTP-based TP by ~3% to Rs 300," Emkay said.

Nuvama Institutional Equities expects improved Cigarette EBIT in H2 as ITC adjusts to higher tax regime. Non-Cigarette segments are seen showing healthy growth.

"At 19 times FY27 EPS and 5–6 per cent dividend yield, valuations are attractive. Given stock correction and improving outlook upgrade to ‘BUY’ from ‘HOLD’, retain TP of Rs 310," Nuvama said.

MOFSL said ITC is still in the transitory phase, with the full tax hike yet to be passed on to consumers. It believes Cigarette’s revenue and EBIT performance will be volatile in the near term.

"The FMCG business continues to perform well, with robust improvement in margins. However, we believe earnings pressure on cigarettes would offset near-term catalysts (recovery in FMCG and Paper) and comfort on valuation. ITC has a full cigarette portfolio to better navigate the tax increase, but competitive pressure from illicit cigarettes will take a toll on the formal cigarette industry," MOFSL said.

This brokerage suggested a target of Rs 285 on the stock.