ITC rallies 9% to hit new high; market-cap crosses Rs 4-lakh crore

The stock rallied to Rs 353 in intra-day trade, extending its Friday's 4% gain on BSE.

ITC has moved higher to its new high of Rs 353, up 9% in early morning trade, extending its Friday’s 4% gain on BSE, in the backdrop of implementation of the goods and services tax (GST) from July 1.

Analysts at Reliance Securities expects ITC to benefit in GST regime, as the tax outgo will remain similar to the current tax structure. That apart, the new regime also provides more clarity and uniformity in taxes across states.

“Tax incidence comes down due to removal of dual taxation. Earlier, Value Added Tax (VAT) was applied on MRP, which included excise duty also. Possible price reduction needed could be in the range of 5-6%,” the global research firm Nomura said in recent report.

Two key positives for ITC are stability and uniformity in tax structure, and a possible 6% reduction price due to absence of dual taxation, added the report.

At 09:32 am; the stock was up 6.5% at Rs 345, as compared to 0.50% rise in the S&P BSE Sensex. Meanwhile, a strong rally in ITC pushed its market capitalisation (market-cap) above the Rs 4-lakh crore mark.

ITC, with market-cap of Rs 418,660 crore, has now joined Tata Consultancy Services (TCS), Reliance Industries (RIL) and HDFC Bank in the 4-lakh crore plus market-cap club. TCS, RIL and HDFC Bank have a market-cap of Rs 463,257 crore, Rs 447,741 crore and Rs 424,819 crore, respectively, the BSE data show.

Thus far in the current calendar year, ITC has outperformed the market by gaining 43% as compared to 17% rise in the S&P BSE Sensex.