ITC (ITC) | News Based Sentiment Analysis

• On September 1, 2025, ITC reported its Q1FY26 earnings, which came in below Deven Choksey's estimates with revenue growth lagging by 3.6% due to higher intersegment adjustments; however, a 'Buy' rating was maintained with a price target of ₹512.0, suggesting a potential 26.2% upside. This indicates analysts still see long-term value despite short-term performance issues.
• ITC initiated the process of acquiring ABREL's Century Pulp Paper Business for ₹3,498 Crore on August 26, 2025, a deal initially approved by ABREL's board in March. This acquisition signals a strategic expansion into the pulp and paper sector, potentially diversifying ITC's revenue streams.
• Despite a generally positive outlook, ITC shares fell up to 4% on September 5, 2025, due to profit-taking following a five-day rally, with ITC specifically slipping 2.34%. This suggests some investors were quick to realize gains after recent positive momentum.
• Following the Q1 GDP growth of 7.8% in India on September 1, 2025, and anticipated GST reforms, FMCG revenues are expected to recover to 9% in FY26, potentially benefiting ITC's FMCG business. Q1 revenue of 12 FMCG companies (excluding ITC) grew 7%, up from 6% in the prior quarter.
• Analyst Kush Ghodasara noted on September 4, 2025, that ITC's positioning is mixed due to GST cuts for most FMCG products to 5% and increased tax for tobacco to 40%. The stock is forming a slanting inverted head-and-shoulder pattern with resistance at ₹427, offering potential trading scenarios.
• ITC's Return on Equity (ROE) was strong at 49.61% as of September 5, 2025, outperforming its 5-year average of 30.55%. The company also demonstrated efficient cost management, spending less than 1% of operating revenues on interest and 8.19% on employee costs.
• Deven Choksey issued a 'Buy' recommendation for ITC on August 31, 2025, with a target price of ₹512 when the price was ₹409.75, implying an upside of 24.95%. This positive outlook contrasts with the 'Sell' rating on ITC Hotels from JM Financial.
• Mutual Fund shareholding in ITC was 13.76% as of June 30, 2025, indicating continued institutional investor interest in the company.

The Investment Story: September 2025 was a month of mixed signals for ITC, with earnings slightly disappointing but strategic acquisitions progressing and analysts offering both bullish and bearish perspectives. The impact of GST changes on different segments adds complexity to the investment picture.

What It Means for Investors: Investors should be aware of the short-term earnings pressures and the varying analyst opinions on ITC's segments. While the long-term outlook remains cautiously optimistic, the GST impact and potential profit-taking suggest the need for careful monitoring.

Looking Ahead: Investors should watch for the outcome of the CCI approval for the ABREL acquisition and monitor ITC Hotels' performance. Further clarity on the earnings outlook and margin pressures in the FMCG and paper segments will also be crucial.

The Bottom Line: ITC remains a complex investment with both opportunities and challenges. The company's strategic acquisitions and diversified portfolio offer potential for growth, but investors should carefully consider the short-term headwinds and the varying analyst perspectives before making investment decisions.