Shares of ITC hit their fresh five-year high today amid a weak trend in the broader market due to negative global cues. ITC shares reached the record high mark of Rs 348.65, rising 2.23 per cent on BSE. ITC stock has been rising for the last four sessions. Shares of ITC have gained 58.26 per cent in a year. In a month, the stock has climbed 10 per cent. Total 10.51 lakh shares of the firm changed hand amounting to a turnover of Rs 36.38 crore on BSE. Market cap of the firm rose to Rs 4.27 lakh crore.
ITC stock has gained 68.42 per cent from the 52 week low of Rs 207, touched on February 24, 2022. The FMCG share, long termed as a defensive and safe bet, has surged 58.26 per cent in 2022. Shares of ITC, which closed at Rs 218 on December 31 surged to Rs 348.65 level today, translating into a gain of 59.93 per cent during the period.
Analysts said the rally in the stock was triggered by weaker global markets and correction in IT companies which led to strong buying in sectors which could comfortably pass on inflation costs like FMCG companies including ITC.
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Pavitraa Shetty, Co-founder & Trainer, Tips2Trades said, “Amid a mostly muted 8 months in 2022, ITC amongst all the Nifty stocks has been the steadiest performer with stellar returns thus far. Currently, the stock is overbought and investors should be booking profits at current levels. A dip near Rs 285- Rs 290 can be great buying levels for target of Rs 360 in the coming months.”
Santosh Meena, Head of Research, Swastika Investmart expects the stock to hit the Rs 500 mark in the long term.
“The counter is in a classical bull run. It is moving in the upward sloping channel for a longer time frame. The overall structure is remunerative as it trades above its all-important moving averages. On the upside, Rs 350 is facing the susceptible area, above this, one can expect the level of Rs 500 plus in the extended timeframe. MACD (Moving average convergence divergence) supports the current strength whereas momentum indicator RSI (relative strength index) is also positively poised,” said Meena.
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Centrum Broking sees a 25 per cent upside in the ITC share from the previous close of Rs 341.05. It has assigned a target price of Rs 424 to the FMCG stock.
“We see potential for ITC to inch-up to new records soon, given: (1) likely potential for price hikes in cigarettes pre-empting next Union budget, (2) strong underlying performance with improved profitability in the Foods portfolio, (3) improving outlook and potential demerger for the Hotel business, and (4) bridging valuation gap. Besides this we note, focus continue on augmenting distribution could scale up FMCG business and expand market share including cigarettes. Nonetheless, we expect benign tax-regime as government is likely now able to better appreciate the legal industry’s logic that a punitive taxation regime on legal cigarettes alone does not necessarily help control use of tobacco in the country, rather causes migration to cheaper forms of tobacco. Given favourable macro and micro conditions we revised earnings introducing FY25Eand maintain strong BUY, with revised DCF-based target of Rs 424 (implying 25.4x avg. FY24/FY25E EPS), ” the brokerage said.
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ITC beat Street expectations by reporting a 38 percent year-on-year rise in net profit to Rs 4,169 crore in the first quarter. Revenue rose 41.5 per cent to Rs 17,289.5 crore compared with the corresponding period a year ago.
Chairman Sanjiv Puri outlined the firm’s ‘ITC Next’ strategy, emphasising its next horizon of growth at the company’s 110th annual general meeting (AGM) last month. The idea is to integrate digital and sustainability to create disruptive business models in a bid to generate enduring value for stakeholders, Puri said.