Positive impactResults
ITC’s tobacco business is going cheap but Kotak Institutional Equities thinks market has it wrong
Economic Times 2 hrs ago·5 Sept 2026, 10:13 am
ITC's tobacco business, which generates the bulk of its profits, is currently trading at a valuation of just 11 times its forward earnings. This discount has raised questions about the company's worth, but Kotak Institutional Equities argues the market is mispricing the asset. The brokerage believes the tobacco unit is undervalued and sees significant upside potential in the stock.
The key to unlocking this value lies in ITC's non-tobacco businesses, which are growing faster than its legacy cigarette segment. Kotak suggests that separating the tobacco and non-tobacco operations could allow each unit to be valued more accurately by investors. This strategic split could potentially unlock significant shareholder value that is currently hidden within the consolidated structure.
Investors should monitor the company's progress in its non-tobacco verticals and any strategic moves regarding its business structure. The ability to effectively separate or highlight the growth of these diverse businesses will be critical in determining the stock's future performance.
Affected stocks
Bullish1 stock
Bull / bear label is derived from the article's AI sentiment — indicative, not advice. Prices may be delayed.
Key takeaways
- Concerns ITC (ITC).
- Category: Results.
- AI reads the tone as positive (potentially bullish) for the stock.
- Assessed as a significant, market-relevant update.
Why it matters
A meaningful update for ITC worth tracking. The tone is positive — historically associated with upward pressure, though not predictive. Use the price and stock snapshot to gauge how the market is responding.
