Kotak Securities believes that ITC's tobacco business is undervalued and suggests that separating it from the non-tobacco operations could unlock significant shareholder value.
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Key takeaway
Kotak Securities argues ITC's tobacco business is undervalued due to conglomerate structure.
- Step 1 · The triggerKotak Securities highlights undervaluation of ITC's tobacco business due to conglomerate structure
- Step 2 · Knock-onMarket and management pressure builds for a structural separation (demerger) of tobacco and non-tobacco businesses
- Step 3 · Knock-onA separation leads to independent capital allocation, procurement, and supplier contracts for both entities
- Step 4 · Reaches youSMEs in ITC's supply chain face renegotiated terms, new contract cycles, and potential shifts in bargaining power
The trigger is reported by the source below. The steps that follow are Branch²’s traced reasoning — how the shock could reach a business like yours, not a prediction.
Source: IN:Economic Times
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