ITC Ltd. is Rated Hold by MarketsMOJO

Current Rating and Its Significance

MarketsMOJO’s 'Hold' rating for ITC Ltd. indicates a balanced stance on the stock, suggesting that investors should maintain their existing positions rather than aggressively buying or selling. This rating reflects a nuanced assessment of the company’s strengths and challenges, based on a comprehensive evaluation of four key parameters: quality, valuation, financial trend, and technicals. The rating was revised from 'Sell' to 'Hold' on 05 August 2026, with the Mojo Score improving by six points to 51, signalling a modest improvement in the stock’s outlook.

Here’s How ITC Ltd. Looks Today

As of 17 August 2026, ITC Ltd. remains a large-cap player in the FMCG sector, with a Mojo Grade of 'Hold' and a current Mojo Score of 51. The stock has experienced a slight decline of 0.4% on the day, reflecting some short-term market pressures. Over longer periods, the stock has faced headwinds, with a one-year return of -32.79% and a year-to-date decline of -31.39%. Despite these returns, the company’s underlying fundamentals continue to demonstrate resilience in certain areas.

Quality: Strong Fundamentals Amidst Challenges

ITC Ltd. boasts an excellent quality grade, underpinned by robust long-term fundamentals. The company has maintained an impressive average Return on Equity (ROE) of 28.29%, signalling efficient capital utilisation and strong profitability over time. Net sales have grown at a healthy compound annual growth rate of 7.72%, reflecting steady demand for its diverse product portfolio. Additionally, ITC is net-debt free, which enhances its financial stability and reduces risk exposure. These factors collectively contribute to the company’s strong quality profile, reassuring investors about its operational strength despite recent earnings pressures.

Valuation: Attractive Pricing Supports the Hold Rating

Valuation metrics for ITC Ltd. are currently very attractive. The stock trades at a price-to-book value of 4.8, which is considered fair relative to its historical averages and peer group valuations. This valuation level suggests that the market is pricing in some caution but still recognises the company’s intrinsic value. Furthermore, ITC offers a high dividend yield of 5.2%, providing income-oriented investors with a compelling reason to hold the stock. The combination of reasonable valuation and dividend income supports the 'Hold' recommendation, as the stock is neither significantly undervalued nor overvalued at present.

Financial Trend: Recent Earnings Pressure

The financial trend for ITC Ltd. has been negative in the most recent quarter ending June 2026. Profit before tax excluding other income (PBT less OI) declined by 25.54% to ₹4,799.26 crores, while profit after tax (PAT) fell by 22.2% to ₹4,081.88 crores. Net sales also contracted by 11.07% to ₹19,114.37 crores. These declines reflect short-term challenges, possibly linked to market conditions or operational factors. Over the past year, profits have decreased by 16.5%, which has weighed on investor sentiment. However, the company’s strong long-term fundamentals and net-debt-free status provide a buffer against these setbacks.

Technicals: Mildly Bearish but Not Overly Concerning

From a technical perspective, ITC Ltd. is graded as mildly bearish. The stock has experienced downward pressure over the past three and six months, with returns of -10.66% and -15.00% respectively. This trend suggests some caution among traders and short-term investors. However, the technical outlook is not severely negative, indicating that the stock may be consolidating or preparing for a potential recovery. Investors should monitor price movements closely, but the current technical grade aligns with the 'Hold' rating, signalling neither a strong buy nor a sell signal.

Institutional Confidence and Market Position

Institutional investors hold a significant 83.4% stake in ITC Ltd., reflecting strong confidence from entities with extensive analytical resources. Such high institutional ownership often indicates that the stock is well-researched and trusted by professional investors, which can provide stability in volatile markets. ITC’s position as a large-cap FMCG company with a diversified product base further supports its appeal as a core portfolio holding for many investors.

What the Hold Rating Means for Investors

For investors, the 'Hold' rating on ITC Ltd. suggests maintaining current positions while closely monitoring the company’s performance and market conditions. The rating reflects a stock that is fairly valued with solid long-term fundamentals but facing near-term earnings challenges and mild technical weakness. Investors should weigh the attractive dividend yield and strong institutional backing against recent profit declines and price volatility.

In essence, ITC Ltd. remains a core FMCG stock with a resilient business model and attractive valuation metrics. However, the recent financial setbacks and subdued price momentum counsel caution. The 'Hold' rating encourages investors to stay invested for the long term while being mindful of potential risks and opportunities as the company navigates evolving market dynamics.

Summary of Key Metrics as of 17 August 2026

- Mojo Score: 51 (Hold Grade)
- Market Cap: Large Cap
- Return on Equity (ROE): 28.29% (Excellent Quality)
- Price to Book Value: 4.8 (Very Attractive Valuation)
- Dividend Yield: 5.2% (High Income Potential)
- Quarterly PBT less OI: ₹4,799.26 crores (-25.54%)
- Quarterly PAT: ₹4,081.88 crores (-22.2%)
- Quarterly Net Sales: ₹19,114.37 crores (-11.07%)
- Institutional Holdings: 83.4%
- Stock Returns: 1Y -32.79%, YTD -31.39%

Investors should consider these metrics in the context of their portfolio objectives and risk tolerance, recognising that ITC Ltd. offers a blend of quality and income with some near-term headwinds.

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