ITC trades higher for fourth straight day, gains 8% from Monday's low

Analysts at ICCI Securities believe stock like ITC could be the next major mover of Nifty and that the stock is likely to retest its February highs once again in the coming weeks

Shares of ITC, on Thursday, were trading higher for the fourth straight day, up 3 per cent at Rs 217.30 on the BSE in intra-day trade. The stock of the cigarettes and fast moving consumer goods (FMCG) company gained 8 per cent from Monday’s low of Rs 201.60 on the BSE. In comparison, the S&P BSE Sensex was up 0.32 per cent during the same period.

In the October-December quarter (Q3FY21), the FMCG segment EBITDA (earnings before interest, taxes, depreciation, and amortization) grew by 28 per cent year on year (y-o-y) to Rs 326 crore with margins expanding by 150 basis points (bps) y-o-y to 9.2 per cent. This was driven by higher operating leverage, enhanced operational efficiencies, portfolio premiumisation and product mix enrichment, notwithstanding incremental operating costs due to Covid-19 and gestation costs of new categories/facilities.

ITC’s FMCG businesses comprising branded packaged foods, personal care products, education and stationery products, incense sticks (agarbattis) and safety matches have grown at an impressive pace over the past several years.

According to a report by Zee Business, ITC is readying a demerger plan. Going forward, ITC is expecting a big unlocking of value for shareholders, the news channel reported, quoting sources.

"The news item under reference is speculative in nature. We draw your attention that if and when there is any material development with respect to the affairs of the Company, the Stock Exchanges are kept advised," ITC said. The company made a clarification with respect to a news item which appeared on ‘www.zeebiz.com’ on the said date captioned “ITC Share Price: BIG Breakout! Check what market experts say on this rally”.

Meanwhile, in the ongoing consolidation, analysts at ICCI Securities believe that stock like ITC could be the next major mover of Nifty and is likely to retest its February highs once again in the coming weeks. The S&P BSE Sensex corrected 5 per cent, while Nifty50 index down 4.4 per cent from their respective record highs touched on February 16.

ITC's stock made a 52 week high of Rs 239.15, on February 9, 2021. Since then, it has been largely range-bound, hovering around Rs 205. It failed to sustain above Rs 212 despite many attempts in the past trading sessions.

However, recently, the stock has taken support of lower band level of Rs 200 and is now witnessing fresh buying momentum. We believe upsides may continue in the stock and it may surpass its February highs in coming weeks, the brokerage firm said with target price of Rs 238 per share in three months with a stop loss of Rs 186.

At 02:00 pm, ITC was trading 1.7 per cent higher at Rs 214 on the BSE, as compared to 1.1 per cent decline in the S&P BSE Sensex. A combined around 58 million equity shares were changing hands on the counter on the NSE and BSE.