ITC shares reached an important turning point on Monday, rising by 1.20% to cross the Rs 400 benchmark for the first time ever. The FMCG giant, whose stock was a joke a year ago, has increased by almost 80% in the last 14 months. The FMCG company has seen growth in both its top and bottom lines. ITC reported consolidated gross sales of Rs 57,027.40 crore, a 21.20 percent year-over-year (YoY) increase for the nine-month period ending December 31, 2022. During the same quarter, net profit increased by 27% YoY to Rs 14,016.18 crore.

Tobacco, paperboard, agriculture, and all other industries from FMCG to hotels to FMCG to hotels led to the success of ITC. For instance, between April and December 2022, the combined income from the FMCG business climbed by 21.11 percent YoY to Rs 37,387.12. On the other side, hotel business revenue in 9MFY23 climbed 100% YoY to Rs 1,880.40. In the same time frame, other businesses also experienced fantastic growth. According to Nirmal Bang Securities, ITC could report a 26% YoY increase in profit after taxes in the fourth quarter of FY23, with a 4.7% YoY increase in revenue.

"Cigarette sales are predicted to increase by 16% YoY, with volume growth increasing by 14% YoY. We expect that the other-FMCG sector will increase by about 19% YoY, maintaining its current growth trend. Furthermore, Nirmal Bang Securities predicted that the hotel industry would expand by 70% YoY as "mobility looks to be on the rise with improved business travel sentiments and higher ARR."Since ITC's managing director Sanjiv Puri has recently spoken about finding new growth vectors, all eyes are on the company's Q4 results. The main focus of Puri's ITC Next plan is a multifaceted effort to revive the company's present FMCG portfolio.

What comes next for ITC?

ITC is a buy at Sharekhan, with a target price of Rs 450. "Despite an uncertain demand environment and ongoing rising inflation on profits, ITC has delivered an unshakable performance in recent quarters." "The strong performance was driven by a good recovery in its core cigarette business (in the post-Covid era), consistent double-digit revenue growth in the non-cigarette FMCG business, and rapid expansion in the hotel and paperboard, paper, and packaging (PPP) business," Sharekhan said.

Motilal Oswal Financial Services set a target price of Rs 450 for ITC in March. "As consumer companies struggle in an unclear operating environment, ITC is better positioned than peers, with increased earnings growth over the last two years, particularly in FY23, and strong earnings visibility compared to rivals into FY24 as well," the brokerage said.