ITC Ltd. is Rated Hold by MarketsMOJO

Current Rating and Its Significance

MarketsMOJO’s 'Hold' rating for ITC Ltd. indicates a balanced outlook on the stock, suggesting that investors should maintain their existing positions rather than aggressively buying or selling. This rating reflects a moderate risk-reward profile, where the stock shows solid underlying strengths but also faces certain headwinds that temper enthusiasm. The rating was revised from 'Sell' to 'Hold' on 15 April 2026, following a nine-point improvement in the Mojo Score, which now stands at 57.0. This score encapsulates a comprehensive assessment of the company’s quality, valuation, financial trend, and technical factors.

Here’s How ITC Ltd. Looks Today

As of 27 April 2026, ITC Ltd. remains a large-cap stalwart in the FMCG sector, with a market capitalisation reflecting its significant presence in the Indian market. The company’s financial metrics and operational performance provide a nuanced picture that justifies the current 'Hold' stance.

Quality Assessment

ITC Ltd. scores an excellent quality grade, underpinned by robust long-term fundamentals. The company boasts an average Return on Equity (ROE) of 27.82%, signalling efficient capital utilisation and strong profitability. Net sales have grown at a healthy compound annual growth rate (CAGR) of 10.97%, demonstrating consistent revenue expansion over recent years. Additionally, ITC is net-debt free, which enhances its financial stability and reduces risk associated with leverage. These factors collectively affirm the company’s operational strength and resilience in a competitive FMCG landscape.

Valuation Perspective

From a valuation standpoint, ITC Ltd. is rated as attractive. The stock trades at a Price to Book (P/B) ratio of 5.3, which is considered fair relative to its historical averages and peer group valuations. The company’s ROE of 33.4% further supports this valuation level, indicating that investors are paying a reasonable price for the returns generated. Despite the stock delivering a negative return of -28.69% over the past year, ITC’s profits have increased by 22.5% during the same period, resulting in a favourable Price/Earnings to Growth (PEG) ratio of 0.7. This suggests that the market may be undervaluing the company’s earnings growth potential, a key consideration for long-term investors.

Financial Trend Analysis

The financial trend for ITC Ltd. is currently flat. The company reported stable results in the December 2025 half-year, with a Debtors Turnover Ratio of 12.97 times, which is the lowest in recent periods but still within a reasonable range. While the flat trend indicates a pause in momentum, it also reflects a steady operational environment without significant deterioration. Investors should note that the stock has underperformed the BSE500 benchmark consistently over the last three years, including a -28.75% return in the past year, which highlights challenges in translating fundamental strength into market outperformance.

Technical Outlook

Technically, ITC Ltd. is rated as mildly bearish. The stock’s recent price movements show some weakness, with a six-month decline of -27.37% and a year-to-date drop of -24.24%. However, short-term price action has seen modest gains, including a 1.23% increase on the latest trading day and a 3.58% rise over the past month. This mixed technical picture suggests that while the stock faces downward pressure, there may be pockets of support that prevent further steep declines. Investors should monitor technical indicators closely for signs of trend reversal or consolidation.

Institutional Confidence and Market Position

Institutional investors hold a significant 84.02% stake in ITC Ltd., reflecting strong confidence from sophisticated market participants who typically conduct rigorous fundamental analysis. This high level of institutional ownership can provide stability to the stock price and indicates that the company remains a core holding for many large portfolios. Nevertheless, the consistent underperformance relative to benchmarks suggests that investors should maintain a cautious stance and weigh the stock’s strengths against prevailing market conditions.

Implications for Investors

The 'Hold' rating for ITC Ltd. suggests that investors should adopt a measured approach. The company’s excellent quality and attractive valuation provide a solid foundation for long-term investment, particularly given its net-debt-free status and strong institutional backing. However, the flat financial trend and mildly bearish technical signals caution against aggressive accumulation at this stage. Investors may consider maintaining existing positions while monitoring quarterly results and market developments closely.

Summary of Key Metrics as of 27 April 2026

ITC Ltd. exhibits a Mojo Score of 57.0, reflecting a balanced outlook. The stock’s one-day gain of 1.23% and one-month increase of 3.58% contrast with longer-term declines of -27.37% over six months and -28.69% over one year. The company’s ROE remains robust at 27.82%, with net sales growing at an annual rate of 10.97%. The valuation remains attractive with a P/B ratio of 5.3 and a PEG ratio of 0.7, signalling reasonable pricing relative to earnings growth. Institutional ownership at 84.02% underscores confidence from professional investors.

Overall, ITC Ltd.’s current 'Hold' rating by MarketsMOJO reflects a stock with strong fundamental qualities and fair valuation, tempered by recent market underperformance and cautious technical signals. This balanced view encourages investors to stay invested but remain vigilant to evolving market conditions.

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