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ITC touches another all-time high, buoys market sentiment

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The ITC stock brought cheer to investors on Thursday , touching a new all-time high of Rs 442.50 in intra-day trade. It rose up to 2.09% during the session, before closing with a gain of Rs 7.65 or 1.76% at Rs 441.10 on the BSE. ITC was the second-biggest gainer in the Sensex pack on Thursday, after Bharti Airtel, which rose 2.75%. The 30-share benchmark rose 98.84 points or 0.16% to close at 61,872.62.

On the NSE, ITC gained 1.9% to close at Rs 441.75, up Rs 8.25 from Wednesday, after touching an all-time high of Rs 442.45 on the broader index. The Nifty50 closed at 18,321.15, edging up 0.2%.

ITC has been riding high thanks to its strong showing in the cigarettes business as well as healthy performance in the hotels segment.

“We see a strong FY24 in earnings with likely value unlocking in hotels. On the flip side, the agri business won’t see the benefit of wheat exports that was seen in FY22 but not in FY23. FMCG will see margin recovery in FY24,” said Abneesh Roy of Nuvama Institutional Equities.

Market capitalisation rose of the conglomerate rose Rs 9,509 crore during the day taking it to Rs 5.48 trillion, with a trailing twelve-month EPS of Rs 15.09. It has recorded a Rs 2.12-trillion rise in market cap in the last one year.

Deven Choksey, promoter of KRChoksey Group, said that the efficient functioning of the management was now showing in the performance. “Profits are driving the share prices up. The plan to demerge and list businesses separately has brought cheer to the market as it has led to value unlocking,” he said.

However, a Nuvama report highlights certain areas of concern for the company, with the primary worry being high raw material inflation. Rupee depreciation also continues to be a pain point.

Further, it adds, revenue in the paperboards segment grew only 1.8% y-o-y owing to muted demand in global markets and the high base. It has also highlighted that the agri business declined by 18% y-o-y, owing to restrictions imposed on wheat and rice exports.

“The stock has, after a short consolidation, once again picked up and given a breakout above the 433-zone with strength indicated, and entered a new territory for fresh targets of 465-475 levels. From current levels, the support now lies at the 418-420 zone. The overall trend has been very strong and one may stay invested in this stock,” said Vaishali Parekh, vice-president (technical research), Prabhudas Lilladher.



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