The stock of the cigarettes-to-hotels conglomerate scaled a record high on Thursday, February 23, at a new summit of Rs 393.9 on the BSE.
ITC shares gained by Rs 10.1 or 2.6 per cent at the strongest level of the day to an all-time high of Rs 393.9 apiece on BSE.
The stock of ITC — whose popular cigarette brands include Wills Navy Cut and Gold Flake — traded in huge volumes. By around noon, as many as 7.9 lakh ITC shares changed hands on BSE so far on Thursday as against a daily average of 3.5 lakh in the past two weeks, as the cigarette manufacturer’s stock held inches to the record high, according to exchange data.
Meanwhile, the S&P BSE Sensex was up 0.2 per cent at 59,838. Along with ITC, the BSE FMCG index too was seen outperforming the benchmark index and was up 0.9 per cent at 16,489.
In the December quarter, ITC had a reported 23.4 per cent jump in net profit at Rs 5,007 crore on a year-on-year basis. Total income too was up 3.6 per cent YoY at Rs 19,021 crore.
Commenting on Q3 earnings the company’s management said that the economic activity continued to gather momentum with sequential moderation in commodity inflation, even as core inflation remained elevated. However, rural demand continued to be relatively subdued, they said, while improving sequentially.
“The volume stability in taxes on cigarettes, backed by deterrent actions by enforcement agencies, continued to enable volume recovery for the legal cigarette industry from illicit trade leading to higher demand for Indian tobaccos,” the release added.
What analysts suggest investors should do on ITC shares
Shares of FMCG companies were pressurized off late amid fears of the likely impact of El Nino factor.
“During the concluded quarterly results commentary from some of top FMCG majors have been that they are witnessing some green shoots in rural markets as inflation has cooled off a bit. However, the adverse weather conditions could be a roadblock to this recovery. Rainfall deficit is a major cause of the rural slowdown because it affects crop sowing and farm income. Hence, El Niño conditions, if they happen, remain a key monitorable going ahead,” Avinash Pathak, Research analyst at LKP Securities said.
“3Y cigarette volume CAGR at 6%+ was a key positive and a benign tax environment should maintain the momentum. FMCG growth was industry-leading, with a positive surprise on margins. EBITDA growth remained strong at > 20% as the company continues to recover from the pandemic. We boost EPS by 4-6% and raise our PT to ₹450. Reiterate Buy on ITC shares,” global brokerage Jefferies had said in earnings review earlier this month. It has upgrade its FY23-25e EPS by 4-6%, marking the third straight quarter of EPS upgrades.
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