Centrum Broking: ITC Will Continue To Outperform The Sector
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Centrum Broking Report
Notwithstanding improving business performance ITC Ltd. went through painful price underperformance and high disbelief on the street regarding its food business, which prompted us to initiate ITC as our ‘Lionheart Series’ stock in September 2020.
It had all the right ingredients for our ‘Lionheart series’ i.e. cigarette business with strong moat (cashcow), high free cash flow among fast moving consumer goods peers, yet high disbelief on its diversification and huge valuation discount to its peers.
In our deep dive analysis into ITC’s foods business we conclude that it is at the cusp of a take-off both in terms of top-line and margins, hitherto concerns on cigarette business are overdone.
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