Shares of ITC remained firm in early trade on Monday as its Q4 results beat market expectations. The FMCG major came out with its fourth-quarter and full-year results for 2020 on Friday, after market hours.

The ITC stock, which underperformed the Nifty YTD, gained a little over 2 per cent at ₹203 in early trade on Monday. Though analysts expect further headroom for the stock, they believe Q1 of the current fiscal could be very challenging. Dividend yield is another thing that makes the stock attractive, say analysts

The cigarettes-to-hotels business has reported a 9 per cent jump in net profit at ₹3,797.08 crore for the fourth quarter of FY20, compared with a net profit of ₹3,481.90 crore posted in the same quarter a year ago. Revenues, however, dipped to ₹11,420 crore (₹12,206 crore).

CLSA, which maintained its outperform call on ITC as dividend payout increased to 88 per cent, has fixed a price target at ₹220 a share.

Another foreign investment advisory firm, Credit Suisse, retained its neutral stance on the company as the FMCG business is on a strong trajectory. CS has a target at ₹205 for ITC.

FMCG, Paperboards and Packaging are now operating at 80-85 per cent of normal levels. ITC has not a witnessed downtrading trend or any meaningful drop in cigarette consumption due to the lockdown, said HDFC securities, adding that the recovery in the cigarette and FMCG business in May and June is encouraging.

Packaged food enjoyed pantry loading benefits and a part of personal care has also recovered. FCF and dividend yield stands at 7 per cent and 5 per cent in FY20, said HDFC Securities, maintaining its buy stance on ITC with a price target of ₹221.

Rajit Rajoriya, Equity Research Associate, Angel Broking Ltd, said:ITC has been aggressive in its FMCG business — launching sanitisers and hand washes, leveraging its extensive distribution network and acquiring a key regional spice brand. However, it has lost around 40 days of cigarette sales due to the lockdown. Its hotels and paper segments, too, are likely to be impacted due to the loss of business. While it missed the Street estimates due to the decline in revenues across all segments, the performance of its FMCG segment has kindled hopes of an improved show in the latter part of the year.,"

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