ITC - Motilal OSwal

ITC
CMP: Rs 161.90
Target Price: Rs 203

Motilal Oswal has maintained its 'buy' rating on ITC with a price
target of Rs 203. "We expect(cigarette) volumes to start recovering
4QFY08 onward and upgrade our cigarette volume growth estimates for
FY08 to -3% against -6% estimated earlier, for FY09 to 5% against the
earlier 4%," the Motilal Oswal note to clients said. "We expect the
paperboard and packaging business to improve topline and margins due
to increasing of paper capacity by 50% in FY09. Branded foods business
is likely to record higher growth rates due to the success of Bingo
(potato wafers), continued growth momentum in Sunfeast (biscuits) and
Aashirwad (atta)," the note added.