 "ITC declines on heavy volumes")
Shares of ITC is trading lower by nearly 2.4% at Rs 349 in otherwise firm market on concerns of cigarette business may decline due to recent price hike. Cigarettes business accounted about 41% of total revenue of ITC.
According to reports the Centre is planning to introduce tougher provisions under law to curb tobacco consumption in the country.
The stock opened at Rs 355 and touched a low of Rs 347 on National Stock Exchange (NSE). The benchmark CNX Nifty was up 0.5% or 36 points at 7,827.
Till 1200 hours, a combined 2.38 million shares changed hands on the counter as against an average 4 million shares that were traded daily in past two weeks on NSE and BSE.
According to Economic Times report, the diversified ITC group has forayed into electronic cigarettes to offset shrinking sales of its conventional tobacco cigarettes due to recurrent price increases.
ITC's cigarette business sales will be down this year due to the 20% price hike effected in several popular brands, the newspaper quoted an unnamed analyst.
The company’s cigarette business reported 21.4% EBIT (earnings before interest, tax) growth with 140 basis points margin expansion as volumes are up by around 3% during the quarter ended June 2014.
Amnish Aggarwal analyst at Prabhudas Lilladher in report dated July 30, 2014 said, “impact of steep 22% weighted average increase in excise duty and its impact on volumes and profit growth will be reflected in the coming quarters. We expect near?term volume pressure and moderation in profit growth”.
Analyst however, maintain ‘accumulate’ rating on the stock with a target price of Rs 381.
According to reports the Centre is planning to introduce tougher provisions under law to curb tobacco consumption in the country.
The stock opened at Rs 355 and touched a low of Rs 347 on National Stock Exchange (NSE). The benchmark CNX Nifty was up 0.5% or 36 points at 7,827.
Till 1200 hours, a combined 2.38 million shares changed hands on the counter as against an average 4 million shares that were traded daily in past two weeks on NSE and BSE.
According to Economic Times report, the diversified ITC group has forayed into electronic cigarettes to offset shrinking sales of its conventional tobacco cigarettes due to recurrent price increases.
ITC's cigarette business sales will be down this year due to the 20% price hike effected in several popular brands, the newspaper quoted an unnamed analyst.
The company’s cigarette business reported 21.4% EBIT (earnings before interest, tax) growth with 140 basis points margin expansion as volumes are up by around 3% during the quarter ended June 2014.
Amnish Aggarwal analyst at Prabhudas Lilladher in report dated July 30, 2014 said, “impact of steep 22% weighted average increase in excise duty and its impact on volumes and profit growth will be reflected in the coming quarters. We expect near?term volume pressure and moderation in profit growth”.
Analyst however, maintain ‘accumulate’ rating on the stock with a target price of Rs 381.