New Delhi, Sept. 7 -- ITC shares have delivered negative returns over the last three years, largely due to investors anticipating that the company's tobacco business earnings will remain low, while the valuation of its non-tobacco business appears stretched relative to its peers.

According to BSE data, ITC shares are 37% down over the last three years compared to a 15% gain in the equity benchmark Sensex. Over the last year, the stock has lost 37%, while the Sensex has shed 6%.

In a report on 3 September, Kotak Institutional Equities (Kotak Securities) highlighted that its reverse-SoTP valuation of ITC shows that the company's tobacco business is available at around 11 times one-year forward EPS (FY27-28E EPS). This suggests that the ma...