Motilal Oswal Downgrades ITC, Positive on Devyani-Sapphire Merger

• Motilal Oswal downgrades ITC to neutral due to a sharp excise duty hike on its cigarette business.
• Siddhartha Khemka warns of potential 25-30% price hikes by ITC, risking volume decline and illicit market comeback.
• Khemka sees no upside potential for ITC's valuation, expecting the stock to remain range-bound.
• Motilal Oswal is positive on the Devyani International–Sapphire Foods merger, citing potential synergies of ₹250–300 crore.
• The merger is expected to improve profitability by 10-15% and lead to higher valuation multiples for the consolidated entity.

Why It Matters: Motilal Oswal downgrades ITC due to tax hike impact, while seeing significant upside from the Devyani-Sapphire merger.