ITC Declares ₹14.35 Dividend Payout for FY25, Highest in 5 Years—Is It Time to Cash In?
In the Indian stock market scene, ever-evolving, timing the investment into a company is all-important. ITC Ltd., a diversified conglomerate with interests ranging from tobacco to FMCG to hotels and paper, has the ever-present consideration for the investor decision-taker in search of a stable counter for growth. As of May 23, 2025, this then leads to the question: Is now the time to buy ITC stock?
The recent developments thus give a full view with a probable glimpse into the future of ITC. Q4 FY25 results, analyst recommendations, dividend announcements, and market conditions form aspects of the investment canvas on which one is supposedly setting her foot.
ITC’s Q4 FY25 Financial Performance
ITC reported a consolidated net profit of ₹19,727 crore for Q4 FY25, which, compared to last year, demonstrates the highest growth; it was ₹5,121 crore in the same period last year. It has to be said that this abnormal rise was almost entirely due to this exceptional gain from the demerger of its hotel business. Barring this one-time gain, net profit from continuing operations rose by a mere 3% year-on-year, amounting to ₹5,155 crore.
Revenue from operations grew by 9.4% to ₹18,494 crore, driven by resilient rural demand and robust performance in the cigarettes segment. The company’s consumer goods segment, including brands like Aashirvaad, Sunfeast, and Bingo, saw a 3.7% rise in revenue. The cigarettes division recorded nearly 6% growth.
Analyst Recommendations and Target Prices
Analysts are generally bullish on ITC, with a few rating it as a “buy” or “strong buy.” Target prices for the stock range from ₹450 to ₹571, implying a price upside for the investors. Motilal Oswal carries a “buy” rating and believes that ITC’s cigarette core business has a steady outlook and scope for sustainable growth.
From the technical perspective, ITC is likely to be priced between ₹405 and ₹461 in the immediate future. Moving averages crossed recently, hence issuing bullish signals. In the past, these signals have tended to yield a short-term average gain of around 2–2.5%.
Dividend Yield and Shareholder Returns
ITC has declared a final dividend of ₹7.85 per share for FY25, adding to the interim dividend of ₹6.50 announced earlier. This brings the total payout to ₹14.35 per share for the financial year, the highest in nearly five years. The record date for this dividend is set for May 28, 2025.
With a dividend yield of approximately 3.15%, ITC offers an attractive option for income-focused investors. The company’s consistent dividend payouts reflect strong cash flows and a shareholder-friendly approach.
Market Outlook and Economic Factors
The Indian market has experienced fluctuations, with ITC’s stock showing a weekly decline of -1.51%, indicating short-term volatility. However, analysts expect rural demand to recover due to a favorable monsoon, while urban demand may improve with lower inflation and tax cuts.
ITC’s diversified business model, including tobacco, FMCG, hotels, and paper, provides a steady stream of income and reduces risk. The recent demerger of the hotel business may impact earnings in the short term but is expected to lead to improved efficiency and return on invested capital in the long run.
Conclusion
Considering ITC’s strong financial performance, positive analyst outlook, attractive dividend yield, and diversified business model, investing in ITC stock appears to be a prudent decision for long-term investors seeking stability and income.
While short-term volatility exists, the company’s fundamentals suggest potential for sustained growth. As always, investors should conduct thorough research and consider their individual risk tolerance before making investment decisions.
