Should you buy ITC shares for short or long term now?

Should you buy ITC shares for long or short term now? The stock of Kolkata-headquartered ITC Ltd—whose demerged hotels business recently listed as ITC Hotels—has gyrated between Rs 404 and Rs 471 so far in February, coming within 19 per cent of its all-time high that was recorded on the same day as headline index Nifty 50’s, on September 27.

At the current juncture, many analysts hold positive the ITC stock, citing the company’s strong market position in cigarettes, and a stable taxation environment for the segment given that Budget 2025 is out of the way—an annual event when manufacturers typically fear a hike in sin taxes.

Here are a few important things to know about ITC—whose popular cigarette brands include Classic, Gold Flake and Insignia—and its shares:

ITC Share Price Movement

At Wednesday’s closing price, the ITC stock has yet to recover 18.7 per cent to revisit its record high, registered on September 27. The stock registered a mild gain to end at Rs 406.5 apiece on February 19, recovering about one fourth of its losses in the past two days.

How analysts view ITC stock

This month, Zee Business analyst Kushal Gupta recommended ITC shares for a one-year target of Rs 560, describing it as a good scrip in the consumption space.

At the current market price, the target implies a 38 per cent upside in the stock.

It also suggests a 12 per cent upmove beyond the current all-time high of Rs 500.

Buying ITC shares for short term?

Also in February, Zee Business analyst Ashish Chaturvedi gave a ‘buy’ call on ITC with a three-month target of Rs 475, citing better-than-expected growth in the company’s quarterly cigarette volumes.

How brokerages rate ITC

“The current trend is inflationary, and calibrated pricing is gradually offsetting inflation. We incorporate the Hotels business as discontinued and so now have a slightly lower sales and margin profile across the forecast years,” wrote BOB Capital Markets analysts in a research report dated February 7.

The brokerage’s analysts found the earnings visibility in the company’s cigarettes unit reasonable.

How ITC fared in Q3 FY25

ITC staged a mixed financial performance for the third quarter of the current financial year, with a 1.2 per cent year-on-year increase in its standalone net profit to Rs 5,638 crore, including the contribution of discontinued operations.

The company’s quarterly EBITDA—or earnings before interest, taxes, depreciation and amortisation, a key measure of operating income—grew 1.6  per cent to Rs 5,828 crore, according to a regulatory filing.

ITC’s margin—a gauge of profitability—largely met Street expectations, at 34.2 per cent.

According to Zee Business research, ITC’s third-quarter net profit was estimated at Rs 5,150 crore, EBITDA at Rs 6,280 crore, and margin at 34.3 per cent.

The Kolkata-based company’s cigarette volumes grew 5.0 per cent, 100 basis points above analysts’ expectations.

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ITC Dividend

The company’s board declared an interim dividend of Rs 6.5 per share, with a record date of February 12.

When ITC Shares Hit Rs 500 All-time High

On September 27, ITC shares registered an all-time high of Rs 500.

That was also the day when market participants last witnessed all-time highs on Nifty 50 and Sensex gauges, at 26,277 and 85,978 respectively.

Persistent foreign institutional outflows, muted earnings, and now global trade war-related concerns have kept investors on their toes, say analysts.

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