ITC target price: Domestic brokerage firms continue to remain divided on ITC shares, who have reassessed their outlook on the cigarette-to-hotels conglomerate following sharp tax-driven price hikes in its core cigarette business. They caution that the full impact of the recent tax-led price increases is yet to play out.

While the company has passed on higher GST and excise duties through aggressive pricing actions, analysts warn that the resulting pressure on volumes could weigh on earnings growth in the coming quarters. The debate now centers on whether ITC's expanding FMCG business and strong cash generation can offset weakness in its largest profit engine.

Shares of ITC Ltd were down nearly a per cent to Rs 281.35, barely holding a total market capitalization of Rs  3.53 lakh crore. The stock has tanked nearly 35 per cent from its 52-week high at Rs 428.50 hit a year ago and its marginally shy of its 52-week low at Rs 275, hit a week ago.

ITC has taken significant price hikes due to the sharp increase in GST and excise duty; this is expected to impact volume. While ITC is better placed than peers, uncertainty around the impact on volume is likely to remain an overhang on the stock. The FMCG-Others business is emerging as a meaningful growth driver, with improving scale and profitability, said Emkay Global Financial Services.

"We expect sales and earnings CAGR of 7 per cent and 5 per cent  over the next 3 years. We value the company on SOTP basis to arrive at a target price of Rs 310, while assuming coverage on ITC," it added with 'add' rating, while the key risks include lower-than-expected cigarette volume growth, higher-than-expected raw material inflation, and weaker-than-expected monsoon.

The government overhauled tobacco taxation by replacing the compensation cess with GST and raised excise duty on cigarettes in February 2026, increasing the indirect tax burden on manufacturers. The changes raised concerns over cigarette volume growth and profitability. The move soured sentiment towards ITC.

ITC cigarette prices were hiked by a blended 25 per cent over February-March, with a 20 per cent hike in Regular segment and 30-35 per cent hike in Kings’ segment. Some distributors indicate a further price hike of 15-18 per cent across segments could be coming, while others say no such hike has been intimated by companies, said Systematix Institutional Equities.

Kings’ volume sales have declined by 20-30 per cent in past 2-3 months; Regular segment is faring better, at flat to a decline of 10-15 per cent. Primary channel inventory would take 2-3 months more to normalize. Secondary volume should also stabilize in 2-3 months. Companies are launching shorter cigarette lengths to try to maintain old price-points and soften the inflationary blow, Systematix added.

"We lower our FY27E-FY28E revenue and EPS estimates for ITC by 2-4 per cent. We build FY26-FY28E revenue and EPS CAGR of 6 per cent and 2 per cent. We expect cigarette volume decline of 8-10% in 1H27 and sharp net-realization decline in 1Q27 to result in FY27 volume and net sales decline of 5 per cent and 11 per cent respectively," it said with a 'hold' rating and a target price of Rs 310.

In the March 2026 quarter, cigarette revenue grew 29 per cent YoY to Rs 11,951.72 crore, supported by price hikes after excise duty changes, while non-cigarette FMCG revenue was up 15.4 per cent YoY to Rs 6,352.41 crore for the quarter. It reported a modest volume growth of 6.5 per cent for cigarette business.

For the quarter ended on March 31, 2026, IT reported a 5 per cent YoY rise in the net profit at Rs 5,133 crore, while revenue from operations increased 17 per cent YoY to Rs 21,695 crore for the reported quarter. It announced a final dividend of Rs 8 per share, taking the overall dividend payout to Rs 14.50 per share for the year.

Among other brokerage firms, ITC has a 'buy' rating from BoB Capital markets with a target price of Rs 355, while PL Capital has given it a 'sell' tag with a target price of Rs 302. Motilal Oswal has a 'neutral' rating, while Axis Direct has a 'hold' rating on ITC with target price of Rs 300 and Rs 325, respectively. Analyst see up to 25 per cent upside on the stock.