ITC bounces back, gains 8% in 3-days after a 18% decline from 52-week high

ITC said the company will hold its 'Institutional Investors and Financial Analysts Day' on Tuesday, 14th December, 2021 from 10.30 a.m.

Shares of cigarettes to fast moving consumer goods (FMCG) major ITC moved higher by 4 per cent to Rs 234.40 on the BSE in Thursday’s intra-day trade after the company said it will hold its 'Institutional Investors and Financial Analysts Day' on Tuesday, 14th December, 2021 from 10.30 a.m.

At 02:16 pm; ITC was the top gainer among 30-share index S&P BSE Sensex, which was up marginally by 0.04 per cent at 58,701.

The stock was trading higher for the third straight trading day, and has rallied 8 per cent during the period, after a    18 per cent decline from its 52-week high level of Rs 265.30 touched on October 18, 2021.

“The company will hold its 'Institutional Investors and Financial Analysts Day' on Tuesday, 14th December, 2021 from 10.30 a.m. (1ST). The details of the event which will be held virtually are enclosed. The said details will also be hosted on the Company's corporate website www.itcportal.com,” ITC said in exchange filing today.

The presentation(s) made at the aforesaid event will be submitted to the Stock Exchanges and hosted on the company's website in due course, it added.

Last month, ITC had forayed into the breakfast segment with ready-to-cook and ready-to-mix offerings via its 'Aashirvaad’ brand. Aashirvaad is ITC's largest brand in the FMCG segment with a consumer spend of over Rs 6,000 crore. While the brand started with packaged atta, it has moved into organic pulses, salts, dairy products, premium flour and spices as well.

“In our view, ITC has a right-to-win in the Indian breakfast category if executed well, given Aashirvaad dominates branded atta. ITC has strong sourcing capabilities due to its agri-business and a brand like Aashirvaad. It also has a deep understanding of needs of Indian consumer given its large foods and hotels businesses, and this foray will help it premiumize the Aashirvaad portfolio. And there is a large B2B opportunity too,” analysts at Edelweiss Securities said in stock update. The brokerage firm has ‘hold’ rating on ITC with 12-month target price of Rs 265 per share.

Meanwhile, ITC has considerably underperformed its benchmark and Consumer peers over the last five years as well as the last 12 months.

Cigarette volumes for ITC and even other players globally have been on a declining trend, given the increased health consciousness among consumers over the last decade. With the government having recently (Oct’21) set up an expert panel tasked with preparing a comprehensive tax policy proposal for all forms of tobacco from a public health perspective, the overhang of a policy change that may affect cigarette volumes remains on the stock, analysts at Motilal Oswal Financial Services said in company update.

The rumored demerger of ITC Infotech, even at Rs 200-250 billion, is only 6-8 per cent of ITC’s current market capitalization and is partly factored in the price already. In our opinion, it does not portend demerger of other FMCG or the Hotels business in the near term, nor does it reduce the dependence on its Cigarette EBIT, the brokerage firm had said.