ITC nears all-time high, up 3%

The stock is outperforming the market by gaining 9.4% compared to 4.6% rise in the benchmark index post Q4 results

ITC Limited has moved higher by 3% to Rs 250, near to its lifetime high of Rs 252.85 touched on April 27 this year. A combined 3.02 million shares have changed hands on the counter till noon deals on both the exchanges.

The stock is outperforming the market by gaining 9.4% compared to 4.6% rise in the benchmark index since the announcement of Q4 results on May 16.

The fast moving consumer goods (FMCG) company had reported a better-than-expected 26% year-on-year (y-o-y) growth in net profit at Rs 1,614 crore, on back of 18% y-o-y rise in net revenues for the quarter ended March 2012.

 

Analyst at Motilal Oswal Research remains positive on the stock due to high entry barriers and strong pricing power in Cigarette business.

“The reversion of Ad-valorem excise duty to specific excise duty is positive for the company, as it reduces the cascading impact of taxes,” the research firm said in its report.

“Ad-valorem excise duty would have resulted in increased excise outgo every time the company raised prices of cigarettes, making margin management difficult,” added report.