ITC Ltd. has reported strong revenue growth in Q2FY25, exceeding expectations. Revenues increased by 16.7% YoY to INR 207,359 million.

The EBITDA also showed a modest increase of 4.8% YoY to INR 67,618 million, aligning closely with projections. However, the adjusted net profit only grew by 2.0% YoY to INR 49,940 million, falling short of expectations due to higher depreciation and reduced other income.

As a result, KR Choksey has revised its earnings per share estimates for FY25 and FY26 downwards by 4.6% and 2.6% respectively, citing subdued demand and inflationary pressures. The firm has maintained its valuation multiples for various segments, including the cigarette business at 15.5x EV/EBITDA and FMCG at 9.2x EV/Revenue.

Consequently, the target price for ITC shares has been adjusted to INR 534, down from INR 545, indicating a potential upside of 10.7% from current levels. The rating on ITC Ltd. shares remains at "ACCUMULATE."