Equity Alert: ITC down 5% on lower-than-expected Jan-Mar net profit

[K.Karthik Raja]

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Equity Alert: ITC down 5% on lower-than-expected Jan-Mar net profit
MUMBAI--1:10PM--Shares of ITC were down 5% at 204 rupees as
investors took
profits after the company Friday reported lower-than-expected Jan-Mar
net profit
of 7.3 bln rupees, up 13% on year, but below 17% growth estimated.
Valuations of the stock are stretched, dealers said. They see
immediate
support around 200 rupees, and then at 190-193 rupees.
The stock is trading around 18.2 times 2009-10 (Apr-Mar) earnings
per share
of 11.70 rupees, brokerage India Infoline said.
India Infoline has maintained a "buy" rating on the stock after
the results,
with a one-year price target of 258 rupees.
Higher cigarette prices are likely to get "successfully absorbed
by the
industry and ITC's cigarette volume decline would significantly reduce
in the
coming quarters," India Infoline said.
Outlook for the non-cigarette businesses such as hotels and paper
remains
positive with continued demand buoyancy, the report said.
So far today, 5.3 mln ITC shares have been traded on NSE. May
futures of the
stock were at a 1-point premium to the spot.