ITC corrects on profit booking

ITC fell 1.38% to Rs 392.35 at 9:46 IST on BSE on profit booking after the stock rose 11.85% in the preceding nine trading sessions to Rs 397.85 on 8 December 2014, from a recent low of Rs 355.70 on 25 November 2014.

Meanwhile, the BSE Sensex was down 27.05 points, or 0.10%, to 28,092.35.

On BSE, so far 52,000 shares were traded in the counter, compared with an average volume of 4.63 lakh shares in the past one quarter.

The stock hit a high of Rs 399.85 so far during the day, which is also a record high for the counter. The stock hit a low of Rs 392 so far during the day. The stock hit a 52-week low of Rs 310.45 on 20 December 2013.

The stock had outperformed the market over the past one month till 8 December 2014, rising 11.87% compared with 0.90% rise in the Sensex. The scrip had also outperformed the market in past one quarter, rising 12.53% as against Sensex's 2.93% rise.

The large-cap company has an equity capital of Rs 798.68 crore. Face value per share is Re 1.

The recent rally in ITC shares was triggered by media reports that the government is unlikely to ban sale of loose cigarettes in near term.

According to reports, the Narendra Modi government has shelved the Cigarettes and Other Tobacco Products (Amendment) Bill which had sought to tighten restrictions on cigarette sales due to the adverse impact it would have on tobacco growing farmers of Andhra Pradesh and areca nut growers of Karnataka.

Reports suggested that Parliamentary Affairs Minister M Venkaiah Naidu held a meeting on Wednesday, 3 December 2014, with Health Minister JP Nadda, Chemicals and Fertiliser Minister Ananth Kumar, Minister of State (MoS) for Commerce and Industry Nirmala Sitharaman, MoS for Agriculture Mohanbhai Kundariya and some MPs from Andhra and Karnataka to discuss the issue.

The outcome of the meeting was that the bill would not be introduced till farmers shifted to alternative crops. Since this was unlikely to happen in the near future, the bill had been indefinitely shelved, reports added.

The government appeared inclined to go ahead with the anti-smoking legislation late last month. Health Minister J P Nadda stated in a written reply in the Rajya Sabha on 25 November 2014, that the Ministry of Health & Family Welfare has accepted recommendations of a committee that has suggested prohibition on sale of loose or single stick of cigarettes, increasing the minimum legal age for sale of tobacco products, increasing the fine or penalty amounts for violation of certain provisions of the Cigarettes and Other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act, 2003 (COTPA), as well as making such offences cognizable. In this regard, a draft note for Cabinet was circulated for Inter-Ministerial consultation.

ITC's net profit rose 8.7% to Rs 2425.16 crore on 14.8% growth in net sales to Rs 8930.32 crore in Q2 September 2014 over Q2 September 2013.

ITC has a diversified presence in cigarettes, hotels, paperboards & specialty papers, packaging, agri-business, packaged foods & confectionery, information technology, branded apparel, personal care, stationery and other FMCG products. ITC is a market leader in cigarettes.

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