The cigarettes-to-hotels conglomerate, ITC, has joined the elite group of companies having market valuation of Rs 6 lakh crore. Shares of the company hit a fresh lifetime high of Rs 485.15, gaining 1 per cent on the BSE in the intra-day trade amid heavy volumes.
With Rs 6.04-trillion market capitalisation (market cap), ITC now stands at the seventh position in the overall m-cap ranking among the BSE listed companies. Currently, Reliance Industries, Tata Consultancy Services, HDFC Bank, ICICI Bank, Hindustan Unilever, and Infosys have market cap over Rs 6 trillion.
The current data shows that the stock price of ITC is Rs 488.3, with a per cent change of 1.97 and a net change of 9.45. This indicates that the stock price has increased by 1.97 per cent and the value has increased by Rs 9.45. Overall, this suggests a positive movement in the stock price of ITC.
Thus far in the calendar year 2023, the stock price of ITC has appreciated 46 per cent on continued buying by the foreign portfolio investors (FPIs). In comparison, the S&P BSE Sensex was up 9.6 per cent during the period.
FPIs raised their ownership of the company in the most recent quarter, keeping in mind the positive prognosis for earnings growth.
ITC is the biggest cigarettes & second largest FMCG company in India with around 80 per cent market share in cigarettes and presence in staples, biscuits, noodles, snacks, chocolate, dairy products & personal care products. The company is also present in paperboard, printing & packaging business, agri and hotels businesses.
ITC has said that its FMCG businesses continue to expand their export footprint, leveraging the equity of their worldclass brands – with a reach now spanning over 60 countries. The PLI scheme has provided further fillip to the company’s exports across Biscuits & Cakes, Snacks, Dairy and Ready-to-Eat categories.
What Do Analysts Say?
Ashish Kyal, the seasoned financial expert and founder of Waves Strategy Advisors, told CNBC: “ITC has been showing promising signs of a strong buying trend. The stock has managed to surge past the crucial resistance level of Rs 480, indicating a potential upward trajectory with even higher levels in sight. Furthermore, the medium-term outlook for ITC remains robust, backed by a solid uptrend.”
A significant short-term breakout for ITC was witnessed when the stock crossed the Rs 470 mark. This breakout added further strength to the bullish sentiment. Considering these factors, Ashish Kyal suggests that it could be a favorable time for investors to consider long positions in ITC.
Emkay Global Financial is bullish on ITC has recommended buy rating on the stock with a target price of Rs 525 in its research report dated July 15, 2023.
It said: “From the core cigarette business perspective, we expect rational tax hikes ahead, given higher share of the ad-valorem component leading to build-up of volumes, which along with improving mix would aid a high-single-digit EBIT growth. In non-cigarette operations, we continue to see profitable growth and improving return profile, where segments are self-sufficient to address their growth needs. Amid the enhanced demand setting in F&B, Agri export and Paper, we see execution to be key. We continue to see ahead-of-time capex as a business moat, which enhances the company’s structural prospects. Value unlocking in Hotels operations remains a near-term catalyst.”
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