ITC slides on profit booking

ITC fell 1.53% to Rs 337.05 at 14:27 IST on BSE on profit booking after a recent rally.

Meanwhile, the S&P BSE Sensex was up 46.39 points, or 0.15% to 31,268.01.

On the BSE, 4.24 lakh shares were traded in the counter so far, compared with average daily volumes of 10.57 lakh shares in the past one quarter. The stock had hit a high of Rs 344 and a low of Rs 337.05 so far during the day. The stock hit a record high of Rs 353.20 on 3 July 2017. The stock hit a 52-week low of Rs 222.05 on 26 December 2016.

The stock had outperformed the market over the past one month till 3 July 2017, rising 7.25% compared with 0.17% decline in the Sensex. The scrip had also outperformed the market in past one quarter, rising 21.51% as against Sensex's 4.38% rise. The scrip had also outperformed the market in past one year, rising 39.80% as against Sensex's 14.45% rise.

The large-cap company has equity capital of Rs 1215.22 crore. Face value per share is Re 1.

Shares of ITC rose 11.08% in three trading sessions to settle at Rs 342.30 yesterday, 3 July 2017, from its close of Rs 308.15 on 28 June 2017.

The stock rose 5.70% to settle at Rs 342.30 yesterday, 3 July 2017, on reports that taxation for cigarettes under the good and services tax (GST) regime is around 5-6% lower compared to the previous tax structure.

Under the GST regime, cigarettes have been put in the highest tax slab of 28%. The tax savings in the GST regime is mainly on account of removal of multi-layer tax regime. Earlier value added tax (VAT) was levied on excise duty, while GST now will not be applicable on cess. The GST came into force from 1 July 2017.

As per a foreign brokerage, the return of predictability in taxation could drive volume growth and opportunity to launch a lower-priced cigarette to drive growth in the organized industry. The brokerage firm has maintained a buy rating for the ITC stock and increased its target price to Rs 390 a share.

Another foreign broking firm said the ITC stock remains its top pick in the consumer sector and it maintained outperform and increased its target price to Rs 385 a share.

ITC's net profit rose 12.1% to Rs 2669.47 crore on 14% growth in net sales to Rs 11125.54 crore in Q4 March 2017 over Q4 March 2016.

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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