Correction in ITC stock a good buying opportunity for investors

A sharp hike in tax on cigarettes could see post-Budget selling, but the company's long-term prospects are good and target prices suggest a significant upside

As the Budget approaches, investors start speculating on the likely changes in taxation and the ensuing impact on various sectors. ITC is always a subject of discussion since the fast moving consumer goods (FMCG) major’s key revenue centre is tobacco and that is a popular target for sin-taxes. 

 

The last three Budgets have not seen tax hikes, so the chances of the 2023-24 financial year (FY24) seeing a tax hike is quite significant. ITC could see growth in its other divisions, such as FMCG (ex-cigarettes) agro, paperboards, hotels, etc., but around 37 per cent of revenues, and a higher share of