ITC rose 0.78% to Rs 277.50 at 12:31 IST on BSE, with the stock extending previous session's gains as there was no announcement on the taxation front on cigarettes in the Union Budget unveiled yesterday, 1 February 2018.The stock had risen 1.51% to Rs 275.35 yesterday, 1 February 2018 after the announcement of the Budget 2018-19.
Meanwhile, the S&P BSE Sensex was down 513.07 points or 1.43% at 35,393.59.
On the BSE, 9.66 lakh shares were traded on the counter so far as against the average daily volumes of 9.24 lakh shares in the past one quarter. The stock had hit a high of Rs 285.35 and a low of Rs 271 so far during the day. The stock had hit a record high of Rs 353.20 on 3 July 2017. The stock had hit a 52-week low of Rs 250.35 on 15 November 2017.
One of the domestic brokerage reportedly said that this comes as a big relief to cigarette companies who have seen cumulative growth in tax incidence on cigarettes at a staggering 202% since 2011-12, i.e. the last 6 years. This will also mean that the thesis of shift from illegal cigarette to legal cigarette shall get a fillip.
The broking firm added that the status quo is rather a relief for the stock. It is maintaining a hold call on the stock at the current market price and expects it to continue to re-rate due to improving prospects of ITC's other businesses.
It also highlighted that over the past decade, contribution of cigarettes to ITC's overall revenue has plummeted and it is expected to accentuate as other businesses mature and attain size & scale.
ITC's net profit rose 16.8% to Rs 3090.20 crore on 5.7% rise in net sales to Rs 9672.57 crore in Q3 December 2017 over Q3 December 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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