The stock of the cigarette-to-hotel group hit a new record high of Rs 393.9 on BSE on Thursday, February 23.
Shares of ITC were the day’s strongest gainer at Rs 10.1, or 2.6 per cent, to hit an all-time high of Rs 393.9 on the BSE.
Shares of ITC – whose popular cigarette brands include Wills Navy Cut and Gold Flake – are trading heavily. Around 7.9 lakh ITC shares changed hands on the BSE on Thursday till noon, according to exchange data, as against the daily average of 3.5 lakh in the past two weeks, as the cigarette maker’s stock soared to a record high.
Meanwhile, the S&P BSE Sensex was up 0.2 per cent at 59,838. Along with ITC, BSE FMCG index was also seen outperforming the benchmark index and was up 0.9 per cent at 16,489.
ITC’s net profit for the December quarter rose 23.4 per cent year-on-year to Rs 5,007 crore. Total income also increased by 3.6 per cent to Rs 19,021 crore.
Commenting on the third quarter earnings, the company’s management said that economic activity continues to gain momentum with a sequential moderation in commodity inflation, even as core inflation remains high. However, rural demand remained relatively low, he said, while improving sequentially.
The release said, “Stability in the volume of taxes on cigarettes, supported by preventive actions by enforcement agencies, continues to drive volume recovery for the legal cigarette industry from illicit trade, thereby boosting demand for Indian tobacco.” Is.”
What analysts suggest investors should do on ITC shares
Shares of FMCG companies witnessed pressure of late amid fears of possible impact of El Nino factor.
“The comments from some of the major FMCG companies during the just ended quarter results were that they are seeing some green shoots in the rural markets as inflation has come down a bit. However, adverse weather conditions may hinder the path of this recovery. Rainfall deficiency is a major cause of rural depression as it affects crop sowing and farm income. Hence, El Nino conditions, if they occur, remain a key watchable going forward, said Avinash Pathak, research analyst at LKP Securities.
“The 3Y cigarette volume CAGR was a significant positive at 6%+ and a benign tax environment should sustain the momentum. FMCG growth was industry-leading with positive surprises at margins. EBITDA growth remained strong at over 20% as the company recovers from the pandemic. We expect EPS to grow by 4-6% and increase our PT to ₹450. Buy on ITC shares,” global brokerage Jefferies said in an earnings review earlier this month. It has upgraded its FY23-25e EPS to 4-6%, the third straight quarter of EPS upgrade.
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