ITC Hits Fresh High Today, Soars Over 60% in Last One Year; Key Points for Investors

ITC Shares Hit Record High: ITC shares scaled an all-time high on Thursday, extending gains to the fifth session in a row. The stock of the cigarettes-to-hotels conglomerate hit a new high of Rs 440, up 1.5 per cent on the BSE in Thursday’s intra-day trade.

Thus far in the calendar year 2023, ITC has outperformed the market by surging 32 per cent, as against 0.73 per cent rise in the benchmark index on strong earnings.

The 52-week high for this stock stands at Rs 441.75 on the NSE. The stock was trading with high volume as over six million shares on NSE were on the block at 10:25 am. The total volume on BSE and NSE stood at 9.6 million.

ITC was also one of the top gainers in the Nifty50 pack, with only Bajaj Auto and Bharti Airtel ahead of it in terms of advances.

ITC shares have given returns of more than 60 per cent over a 12-month period, outperforming Nifty50. The 50-stock index has given close to 14 per cent returns during this period. May month’s returns stand over 7 per cent for ITC.

Last week, ITC reported a strong set of quarterly numbers. Its net profit increased 1.1 per cent on a year-on-year basis to Rs 5,086.9 crore for the quarter that ended March 2023 and revenue expanded 0.6 per cent to Rs 17,224 crore, according to a regulatory filing.

Both the top-line and the bottom-line exceeded analysts’ estimates.

Should you Buy, Sell or Hold the FMCG Stock?

ITC’s stellar performance is backed by strong fundamentals. The company’s operating profit has been either increasing or broadly stable in the last few years. Its net profit has seen a sustained rise on a quarterly basis.

As brokerage firm Motilal Oswal Financial Services pointed out, “Unlike its staples peers, ITC has reported consistent impressive performance in its other FMCG business (nearly 19 per cent revenue growth and margin improvement despite elevated raw material costs), along with robust performance in the hotels’ segment. ITC’s earnings visibility remains better than peers.”

Motilal Oswal has a buy call on the stock with a target price of Rs 485 as it pointed out that ITC posted a healthy earnings per share (EPS) growth of about 24 per cent in FY23 and it expects an EPS CAGR of nearly 15 per cent over the next two years.

“ITC’s earnings outlook is better compared to other large-cap staples players in FY24 and FY25,” said Motilal Oswal.

Not only the fundamentals, but technical indicators are also supporting the bullish trend of ITC. The stock is comfortably above its short-term (5-day, 10-day, 20-day, 30-day, 50-day) and long-term (100-day and 200-day) simple moving averages.

“At the current juncture, ITC is extremely bullish based on price action. From the indicator point, weekly RSI is continuously trading between the 50-80 zone which is a sign of an established bullish trend. One can buy in the range of Rs 435-445 for an upside target of Rs 475 with a stop loss of Rs 420,” said Jigar S. Patel, Senior Manager of Equity Research at Anand Rathi Share and Stock Brokers.

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