ITC Stock Reached a New High and Joined the Rs. 6 Trillion Market Cap Club; Should You Buy, Sell, or Hold?

ITC, a conglomerate that produces everything from hotels to cigarettes, has entered an exclusive club of businesses with a market value of Rs 6 lakh crore. Shares of the business increased 1% in intraday trading on the BSE amid strong volumes, reaching a new lifetime high of Rs 485.15.

ITC now holds the seventh spot in the overall m-cap ranking among the BSE listed firms with a market capitalization of Rs 6.04 trillion. Over Rs 6 trillion is now the market value of Reliance Industries, Tata Consultancy Services, HDFC Bank, ICICI Bank, Hindustan Unilever, and Infosys.

According to the most recent data, the stock price of ITC is now Rs 488, with a net change of 9.45 and a change in percentage of 1.97. This shows that the value has grown by Rs 9.45 and the stock price has climbed by 1.97 percent. Overall, this points to an increase in ITC’s stock price.

The stock price of ITC has increased 46% so far in 2023 because to ongoing purchases by foreign portfolio investors (FPIs). The S&P BSE Sensex, in contrast, increased 9.6% throughout that time.

FPIs increased their stake in the firm during the most recent quarter, taking into account the favorable outlook for profits growth.

With a market share of almost 80% in cigarettes and a presence in basics, biscuits, noodles, snacks, chocolate, dairy goods, and personal care items, ITC is India’s largest cigarette and second-largest FMCG firm. The corporation also operates in the paperboard, printing and packaging, agriculture, and hotel industries.

According to ITC, its FMCG companies continue to grow their export footprint by using the value of its renowned brands, which have a reach that now extends to over 60 countries. The PLI plan has given the company’s exports in the areas of biscuits and cakes, snacks, dairy products, and ready-to-eat foods an additional boost.

What Claim Analysts?

The founder of Waves Strategy Advisors and seasoned financial analyst Ashish Kyal told CNBC that ITC has been displaying encouraging indicators of a robust purchasing trend. A possible rising trajectory with even higher levels in sight has been indicated by the stock’s ability to smash over the significant resistance level of Rs 480. Additionally, ITC’s medium-term prognosis is still positive and supported by a strong rise.

ITC had a huge short-term breakout when the stock broke the Rs 470 threshold. The bullish attitude became even stronger as a result of this breakthrough. In light of these elements, Ashish Kyal argues that now would be a good moment for investors to think about taking long positions in ITC.

Emkay Global Financial is positive on ITC and in its research report dated July 15, 2023, recommended buy rating on the company with a target price of Rs 525.

“From the core cigarette business perspective, we expect reasonable tax increases ahead, given higher share of the ad-valorem component leading to build-up of volumes, which along with improving mix would aid a high single-digit EBIT growth,” the statement said. We continue to see profitable growth and a better return profile in non-tobacco activities, where segments are able to meet their own growth requirements. Execution is crucial in light of the increased demand setting in food and beverage, agricultural exports, and paper. We still see ahead-of-schedule spending as a competitive advantage that improves the company’s structural prospects. Value creation in the hotel industry is still a short-term catalyst.