ITC is trading higher by 4% at Rs 235 after declining almost 8% in six consecutive days from Rs 247 on April 28, after some broking houses said that drop in the stock price on account of higher excise or lower volume concerns is a buying opportunity.
Citigroup raises target price of the stock to Rs 255 from Rs 232 and reiterates its "buy" rating, calling it its "preferred pick" in the Indian consumer universe
As per Reuters report “Citigroup says the government has proposed an amendment to the pricing methodology for an excise duty announced in March. The change would be positive for cigarette manufacturers as it would provide better pricing flexibility and margin upside.”
Macquarie maintains outperform with price target of Rs 257, as it says that Indian government changed excise duty on cigarettes from what was proposed at the time of budget; volume-linked taxation is favorable for the company.
The stock raised to buy from sell at Antique Broking by saying; “Removal of the ad-valorem excise duty on cigarettes would maintain ITC’s strength of pricing in the medium to longer term and its ability to expand margins on a consistent basis”