You are here: Home » Markets » News
Business Standard

ITC regains Rs 3-trillion market cap; stock hits 21-month high

In the past one week, ITC has outperformed the market by surging 13 per cent

Topics
ITC Ltd | Buzzing stocks | Markets

SI Reporter  |  Mumbai 

ITC
Photo: Shutterstock

ITC's market capitalisation returned to Rs 3 trillion-mark on Wednesday after the stock of the biggest cigarette and second largest fast moving consumer goods (FMCG) company hit a 21-month high on the bourses. The stock hit an intra-day high of Rs 244.70, up 1 per cent on the BSE today, and was trading at its highest level since December 2019.

In the past one week, ITC has outperformed the market by surging 13 per cent on expectations of an improvement in the company’s businesses. In comparison, the S&P BSE Sensex was up 0.62 per cent during the week. At 01:55 pm, ITC’s market cap stood at Rs 2.999 trillion on the BSE, exchange data shows.

Foreign brokerage houses are bullish on ITC as they believe the company’s cigarettes business will fully recover with the aggressive vaccination drive and reduction in Covid-19 cases. In April-June quarter, ITC's cigarettes volumes were impacted by the second wave (down 21 per cent on two-year basis). However, week‐on‐week improvement was seen since mid-June with most returning to normalcy and witnessing faster recovery compared with the first wave.

"ITC has 78 per cent market share in cigarettes and presence in staples, biscuits, noodles, snacks, chocolate, dairy and personal care products. Lower lockdown impact and the faster recovery trends seen in cigarettes are positives and improve earnings growth visibility. In addition to the rising profitability of FMCG, improvement in IT is notable, and can offer incremental upsides," said analysts at Emkay Global. They maintain a ‘buy’ rating on the stock with a target price of Rs 270.

Meanwhile, according to analysts at HDFC Securities, ITC is expected to take a price hike in cigarette in H2FY22. Other FMCG margin improvement continues, with an expected price hike, which would set off the raw material inflation.

As the number of Covid-19 cases started to reduce, mobility improved, restrictions were progressively lifted, stores remained open for a longer time, and modern trade (MT) reopened in a phased manner. The demand in July-August 2021 has been better than that in June’21.


Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Wed, September 22 2021. 14:09 IST
RECOMMENDED FOR YOU
.