Jefferies on ITC : Buy, TP Rs 350

Cigarette volumes & EBIT continue to decline, reflecting pressure from sharp tax hikes, although ITC mgmt has undertaken a series of measures to navigate these challenging conditions. Calibrated price hikes should support a gradual recovery, even as significant tax arbitrage on illicit cigarettes persists. FMCG & Paperboards reported a strong 2Q, while Agri was in line Trim EPS by 2-3% but expect a sequential improvement in cigarette trends.

ITC LTD

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