GQG ups stake in ITC, Rajiv Jain says it’s a great growth story and reasonably valued

ITC  is a great growth story and is reasonably valued, GQG Partners CIO Rajiv Jain has said after his investment firm raised stake in the conglomerate in the December quarter after having owned the stock for two years.

At the current level of 23x earnings, ITC’s valuation is “incredibly attractive” and the stock should see lower double-digit earnings as well, Jain said in an interview with CNBC.

While ITC was unlikely to see “multiple expansion”, its growth should still be quite significant, at around 14-15 percent, he said, adding the FMCG arm of the conglomerate had done incredibly well and finally come to fruition.

The hotels segment, too, would see value unlocked and further room for growth once it was spun-off into a separate entity, Jain said.

At 2 pm, ITC was trading at Rs 464.85 on the NSE, down 0.38 percent from the previous close price.

GQG Partners upped its stake in the hotels-to-cigarettes conglomerate in the third quarter of the financial year 2023-24 to 2.79 percent from 1.58 percent.

According to the current market price of Rs 463.9 apiece, GQG’s stake in ITC is estimated to be worth around Rs 16,112 crore.

Talking about his Adani play, Jain said he believed in “opportunistic” investing and therefore entered the group’s stocks earlier last year. The Adani group stocks were hammered after American short-seller Hindenburg Research in a report late January 2023 accused the Adani group of manipulating stock price and falsifying records.

Jain double and triple-down on the counters during May-August, taking his investment in the group companies to a whooping $4 billion.

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GQG Partners is also bullish on domestic infrastructure space. Jain said he also held positions in JSW Energy and JSW Steel.

According to Bloomberg Data, the foreign portfolio investor has increased its stake in India to around $9.9 billion in 2023 from $4.4 billion.

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