ITC shares closed at Rs 396, up 1.92% on NSE. The index heavyweight has been one of the top performers on the Street, rising nearly 19% on a year-to-date basis. In the last one year, the shares have jumped 50%.
Technically, the stock has moved in the range of Rs 318 to Rs 356 levels from September 2022 to January with volumes being quite low during this period. The price breached the consolidation phase at Rs 356 and moved upwards with high volumes to make an all-time high of 394 odd levels.
“In the last 20-25 days, the price has made a rounding bottom with the neckline forming around 394 odd levels and in this week with relatively high volumes, the price has moved above the neckline making a new all-time high of around 397,” said Viral Chheda, Technical Analyst, SAJ Finance & Securities.
The RSI Oscillator is moving in an upward trend along with an increase in volume indicating further upside from here.
Investors can buy the stock from the current levels and more on dips of Rs 382 for a target price of Rs 450-490 in the next six to eight months, according to Chheda. The stop loss can be kept at Rs 365 on a weekly closing basis.
The sustained rally in ITC can be attributed to its resilient performance in the past few quarters, despite an uncertain demand environment and sustained inflationary pressures on margins. The stock is sitting with attractive valuations at 23x/21x its FY2024/FY2025E EPS.”The resilient performance was driven by a good recovery in its core cigarette business (in the post-Covid era), steady double-digit growth in the non-cigarette FMCG business, and accelerated growth in the hotel and paperboard, paper and packaging (PPP) business,” brokerage Sharekhan said.
For the fourth quarter, Axis Securities expects cigarette business to grow 16% year-on-year, while FMCG growth is seen at 14%, primarily led by price growth. EBITDA margins for the quarter are estimated to expand 450 basis points on account of GM expansion, better mix, operating leverage and cost savings.
The cigarette-to-hotel conglomerate gas reported a 21% rise in net profit for the quarter ended December at Rs 5,031 crore, while revenue from operations, net of excise duty, rose 2% to Rs 16,226 crore.
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