Stay invested in ITC for long-term gains

Mumbai: Investment Advisor SP Tulsian is of the view that one should remain invested in ITC for long-term.

"ITC has a strong cash flow in agri, retail and hotels. Presently the tobacco business constitutes about 62 pc of their total turnover, which they are planning to bring down to 50 pc. The company may increase its market share in hotel from 10-13 pc," said Tulsian.

"ITC has a huge investment lined up of Rs 10,000-12,000 crore, which will probably come from their internal accruals, which is again a positive factor. So if one takes all these aspects into consideration the FY07 earning per share is likely to be more than Rs 8," he added.

Tusian is of view that ITC should be able to show a growth of more than 20 per cent in the coming three-five years. The company has shown a growth of compounded annual growth of more than 22 per cent in the last five years.

A company giving such kind of appreciation and promising sustained growth for the next five years is indeed a profitable stock.

"One should remain invested and taking it a long-term horizon maybe of about a year or so then probably one will make good appreciation from the investment," he added.