Broking House: UBS
Rating: Buy Price Target: Rs 300
Prima facie, the union bud-get is negative for cigerette maker ITC because of the hike in duties, says UBS in a post budget note on the company. The increase in excise duties is higher than expectations, the note says. However, other measures announced in the budget — including tax incentives for the hotel industry, will be positive for the firm. This will push up ITC’s bottomline for FY11 as the company is also completing a large hotel during the year. UBS has kept its buy rating on the company, but to account for the worsening margin picture on the cigerette front, it has cut down the price target from Rs 325 earlier.
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