This FMCG stock could make you Rs 100 per share—Brokerage report points to big upside; check target price

The broader market continued to trade volatile on Wednesday, but foreign brokerage Macquarie has issued a positive outlook on ITC Limited, the cigarettes and diversified FMCG major. The brokerage believes that the stock still offers meaningful upside from current levels and could generate strong returns for investors.

Macquarie has maintained its Outperform rating on ITC and set a target price of Rs 500, implying an upside of nearly Rs 100 from the current market price of around Rs 401.

Why is Macquarie bullish on ITC?

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Macquarie says that the market has been overreacting to tax-related concerns in the cigarettes segment. The recent draft excise document had mentioned the possibility of a per-stick tax, which spooked investors.

However, the brokerage clarifies that the rates mentioned in the draft appear to be caps, not the actual tax rates likely to be implemented. This suggests that no major tax shock is imminent for ITC’s cigarette business—an important relief for investors.

EBIT growth of over 10 per cent expected in FY27

Macquarie sees multiple tailwinds for ITC’s cigarette segment:

Discounting is expected to moderate gradually in the post-GST environment, improving sales realisation.

Leaf tobacco costs are softening, providing margin support.

Overall, EBIT for the cigarette business may grow over 10 per cent in FY27.

The brokerage has also raised its EPS estimates by 2 per cent and increased its target price by 4 per cent based on improved margin visibility and stable tax expectations.

Re-rating hinges on clarity in tax structure

Macquarie notes that a re-rating of the stock will only be possible when there is clear visibility that the government will not impose a new cess or a steep tax hike on cigarettes.
For several years, persistent tax uncertainty has prevented ITC from commanding premium valuations, despite strong fundamentals.
If clarity emerges, ITC could see significant value unlocking, the brokerage says.

ITC: A diversified consumer giant

Although best known for its cigarettes business, ITC is one of India’s largest diversified FMCG companies, headquartered in Kolkata. Its operations span cigarettes and tobacco and other fast-moving consumer goods (FMCG) products, hotels, agri-business, paperboards and packaging.

While cigarettes contribute the largest share of revenue, ITC’s FMCG portfolio is expanding rapidly, reducing dependence on tobacco over time.

What investors should note

Macquarie’s report has brought fresh focus back to ITC. Long viewed as a stable, defensive stock, ITC now appears attractively valued, according to the brokerage.

With limited near-term tax risk, improving margins and stronger visibility in earnings, ITC could offer compelling returns in a volatile market.