Sunday, August 28, 2011

ITC - Buy on declines

An established cigarette major, 60% of ITC's revenues are contributed by other businesses such as FMCG, hotels, paper, stationery and agriculture. Nevertheless, ITC relies heavily on the cigarette business as it generates 80% of net profit. Consistent growth, strong cash flows and high dividend payout of more than 45% make the company a safe haven for investors in these uncertain times.

Time Span Price Change %Change
Today 196.85 -5.50 -2.71
Week 198.85 3.50 1.76
Month 200.80 1.55 0.77
Three Months 189.10 13.25 7.00
Six Months 156.15 46.20 29.58
One Year 163.15 39.20 24.02

Our recommendation -

ITC is a defensive stock and will give a decent return over a long term. Investors should utilize any sharp correction to buy this stock and hold for a period of 18-24 months for a good return on investment. Buy around 180 levels on a weak day !

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Ingenious Investor
Equity Research Division

Ravina Consulting
Pattamal Plaza
3rd Cross Kamanahalli

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