ITC Gears Up For Q1 Print: SEBI RA Rohit Mehta Highlights Strong Fundamentals, ₹456 Resistance
Synopsis
The analyst flagged strong EPS and PBT gains in Q4, a healthy dividend payout, and potential upside if the stock breaks past ₹456.
ITC is set to report its first-quarter results on Friday, and market participants are eyeing the stock closely for cues on whether it can shake off its recent dip and head higher.
SEBI-registered research analyst Rohit Mehta weighed in with a detailed breakdown.
At the time of writing, shares of ITC were trading at ₹417.20, up 1.3% on the day.
The analyst noted that institutional investors have been shuffling their exposure as foreign institutional holdings fell from 39.87% in March 2025 to 37.98% by June, while domestic institutions raised their stake from 45.19% to 46.91%.
Looking back at the company’s performance in the previous quarter, Mehta highlighted that sales were up 10.14% year-on-year, though slightly down quarter-on-quarter.
Operating profit improved modestly, but what stood out was a sharp jump in profit before tax and earnings per share. Profit before taxes rose by over 217% year-on-year and 218% quarter-on-quarter, while earnings per share (EPS) surged nearly 284% compared to last year.
From a fundamentals standpoint, Mehta pointed out several strengths.
ITC has no major debt on its books, pays an attractive dividend yield of 3.44%, and has maintained a solid three-year average return on equity of 28%.
It also continues to share profits generously, with a dividend payout ratio of nearly 79%.
On the other hand, the stock trades at a relatively high 7.5 times book value, and its five-year sales growth has been on the slower side, at 8.81%.
He also flagged the large chunk of earnings coming from other income, standing at ₹17,795 crore, which investors may want to keep in mind.
On the technical front, Mehta said the stock is currently consolidating just above a support range of ₹384 to ₹390.
The next major resistance levels are at ₹456 and ₹482, the latter being its all-time high. If ITC breaks through ₹456, he believes it could open the door to another leg up.
On Stocktwits, retail sentiment for ITC was ‘bearish’ amid ‘low’ message volume.
ITC’s stock has declined 13.8% so far in 2025.
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