Accumulate ITC; target of Rs 310: Dolat Capital

Dolat Capital's research report on ITC

ITC extended the newly acquired Charmis brand to a range of skincare products that would compete with HUL��s Pond��s and Nivea, and help scale up its presence in the high-margin personal-care business. It has also acquired floor cleaning brand Nimyle from Kolkata-based Arpita Agro Products. Amidst competitive pressure, it will take ~3-4 years with strong distribution for ITC to become a significant player in the categories.

Outlook
Cigarette volume growth is expected to amplify on the favorable base of past one year (~18% volume decline in past three years). Packaged food business, which accounts for 76% of ITC��s Non-Cigarette FMCG business is expected to drive growth. Moreover, normal monsoon forecast and increasing disposable income, we anticipate consumer shift from bidi to cigarette as well as to branded FMCG products which is likely to improve company��s profitability. Maintain Accumulate.

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