ITC extends gain on acquisition of Johnson & Johnson brands

At 1040 hours, the stock was up 1.5% at Rs 384, extending its previous day's 2% gain on BSE.

ITC is trading higher by 1.5% at Rs 384, extending its previous day’s 2% gain on BSE, after the company acquired trademarks for 'Savlon' and 'Shower To Shower' in India from Johnson & Johnson for an undisclosed amount.

The company said it has entered into an agreement with health and pharmaceuticals major Johnson & Johnson (J&J) to buy two of its brands — Savlon, a brand of antiseptic soaps and liquids, and Shower to Shower, a prickly heat powder.

Analyst at Antique Stock Broking initiates coverage on the stock with a Buy rating and target price of Rs 450 per share.

The company has been repeatedly successful in launching brands in highly competitive categories like deodorands, biscuits, and noodles. It is too early to gauge the earnings potential of this acquisition, however it can now tap into a new market, which is sized at Rs 4,600 crore, analyst said in a report dated February 16, 2015.

The stock opened at Rs 377 and hit a high of Rs 385, its highest level since December 16, 2014 on BSE. Till 1040 hours, a combined 1.94 million shares changed hands on the counter on BSE and NSE.