ITC surged 5.81% to Rs 342.65 at 15:10 IST on BSE on reports that taxation for cigarettes under the good and services tax regime is around 5-6% lower compared to the previous tax structure.
Meanwhile, the S&P BSE Sensex was up 298.82 points or 0.97% at 31,220.43
On the BSE, 21.17 lakh shares were traded on the counter so far as against the average daily volumes of 10.24 lakh shares in the past one quarter. The stock had hit a high of Rs 353.20 so far during the day, which is a record high. The stock hit a low of Rs 340.30 so far during the day. The stock had hit a 52-week low of Rs 222.05 on 26 December 2016.
The stock had outperformed the market over the past one month till 30 June 2017, rising 2.94% compared with the Sensex's 0.76% fall. The scrip had also outperformed the market over the past one quarter, gaining 15.48% as against the Sensex's 4.3% rise. The scrip had also outperformed the market over the past one year, surging 28.33% as against the Sensex's 14.53% rise.
The large-cap company has equity capital of Rs 1214.74. Face value per share is Rs 1.
As per reports, taxation for cigarettes under the new good and services tax (GST) is around 5-6% lower than the previous tax structure. Under the GST regime, cigarettes have been put in the highest tax slab of 28%. Basic excise duty and additional excise duty are repealed and only national calamity duty is continuing under the GST regime for cigarettes. ITC is the market leader in cigarettes with a share of nearly 80%, reports indicated adding that over 60% of the company's revenues come from its cigarettes business.
The tax savings in the GST regime is mainly on account of removal of multi-layer tax regime. Earlier value added tax (VAT) was levied on excise duty, while GST now will not be applicable on cess.
More From This Section
The GST came into force from 1 July 2017, amid a historic midnight session in the Central Hall of Parliament on 30 June 2017. The biggest tax reform since independence - GST - will pave the way for realization of the goal of One Nation - One Tax - One Market.
As per a foreign brokerage, the return of predictability in taxation could drive volume growth and opportunity to launch a lower-priced cigarette to drive growth in the organized industry. The brokerage firm has maintained a buy rating for the ITC stock and increased its target price to Rs 390 a share.
Another foreign broking firm said the ITC stock remains its top pick in the consumer sector and it maintained outperform and increased its target price to Rs 385 a share.
ITC's net profit rose 12.13% to Rs 2669.47 crore on 13.82% growth in total income to Rs 11527.64 crore in Q4 March 2017 over Q4 March 2016.
ITC is a diversified company, with presence in cigarettes, hotels, paperboards & specialty papers, packaging, agri-business, packaged foods & confectionery, information technology, branded apparel, personal care, stationery and other FMCG products. ITC is a market leader in cigarettes.
Powered by Capital Market - Live News