ITC extends gains after announcing 1:2 bonus issue

ITC jumped 4.99% to Rs 346.40 at 10:10 IST on BSE, with the stock extending previous session's gains triggered by the company announcing a 1:2 bonus share issue.

The bonus issue announcement was made by the company at the fag end of the trading session on Friday, 20 May 2016. After the announcement, the stock had risen 1.55% to Rs 329.95 on Friday, 20 May 2016.

Meanwhile, the BSE Sensex was up 50.34 points, or 0.2%, to 25,352.24.

On BSE, so far 6.35 lakh shares were traded in the counter, compared with an average volume of 6.8 lakh shares in the past one quarter. The stock hit a high of Rs 354.75 and a low of Rs 345.30 so far during the day. The stock hit a 52-week high of Rs 359.75 on 26 October 2015. The stock hit a 52-week low of Rs 268 on 29 February 2016. The stock had outperformed the market over the past one month till 20 May 2016, sliding 1.51% compared with 2.1% decline in the Sensex. The scrip had also outperformed the market in past one quarter, rising 8.23% as against Sensex's 6.72% rise.

The large-cap company has an equity capital of Rs 804.72 crore. Face value per share is Re 1.

ITC after market hours on Friday, 20 May 2016 announced that the company has fixed 4 July 2016 as the record date for the bonus issue.

ITC's net profit rose 5.67% to Rs 2495.20 crore on 9.49% rise in total income to Rs 10580.33 crore in Q4 March 2016 over Q4 March 2015. The company announced the results at the fag end of the trading session on Friday, 20 May 2016. The muted growth in revenue in Q4 March 2016 reflected the continuing impact of higher taxes and regulatory pressures on the legal cigarette industry, weak demand conditions in the FMCG industry and synchronization of trade pipeline in the Notebooks category. However, the company said that the improvement in performance in Q4 March 2016 was driven by improved realisations, margin expansion, benign input costs and favourable base effect.

ITC said that the board of directors of the company at its meeting held on 20 May 2016, has recommended dividend of Rs 8.50 including a special dividend of Rs 2 per share for the year ended 31 March 2016 (FY 2016).

Meanwhile, the company said that the operating environment for the legal cigarette industry is likely to remain extremely challenging in the year ahead in view of the high levels of taxation which was exacerbated by a further increase of 10% in excise duty as announced in the Union Budget 2016, rising illegal trade and increasing regulatory pressures including the new graphic health warnings (GHW).

ITC is a diversified company, with 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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