ITC Shares Today: Shares of FMCG giant ITC soared to over a three-year high of Rs 304.70, up nearly 1 per cent on the BSE on Wednesday’s intra-day trade. The stock has surged 13 per cent in the past one month on hopes of healthy earnings coupled with stock buying by foreign investors. The stock gave a 3-year return of 11.85 per cent as compared to Nifty 100 which gave a return of 48.25 per cent. (as of last trading session). And, it generated 11.85 per cent return as compared to Nifty FMCG which gave investors 45.45 per cent return over 3 year time period.
In CY22 so far, the scrip has outperformed the market as it soared 40 per cent on foreign portfolio investors (FPIs) shopping spree. FPIs have hiked their stake in ITC for the second straight quarter. They bought an additional 2.69 percentage point stake in the diversified fast-moving consumer goods (FMCG) company during the first six months of CY22.
As of June 30, 2022, FPIs holding in ITC increased to 12.68 per cent from 11.99 per cent at the end of the March 2022 quarter (Q1CY22). Likewise, on December 31, 2022 (Q4CY21), FPIs held a 9.99 per cent stake in ITC. Data shows that the FPI holding in ITC was at the highest level since March 2021 quarter, when they held 12.79 per cent stake in the company.
In his speech at the AGM, last week, ITC Chairman & MD Sanjiv Puri informed shareholders and board members about the stellar performance of the company in recent years. Puri praised the company’s performance in the FMCG segment and announced the company’s plans to foray into global merchandise.
“As we achieve scale for your company’s FMCG portfolio, it is also our aspiration to take these world-class brands to overseas markets. In recent years, we have established distribution arrangements abroad enabling appreciable progress of exports of ITC’s ‘Proudly Indian’ brands to over 60 countries. Over time, such exports will make a substantial contribution to the growth of your Company’s value-added FMCG portfolio,” ITC Chairman & MD said.
Meanwhile, the board of directors of ITC is scheduled to meet on Monday, August 1, 2022, to consider and approve the financial results of the company for the quarter ended June 30, 2022 (Q1FY23).
Should you Invest in The FMCG Stock?
The FMCG gaint emerged as a good defensive play in volatile equity markets. Global stocks markets including India are under pressure due to higher inflation and expected monetary tightening by central banks. Analysts also fear a recession due to aggressive rate hikes by the US federal reserve.
Analysts at Motilal Oswal Financial Services believe that revival in cigarette demand and recovery in FMCG businesses make ITC an attractive investment bet. “A revival in cigarette demand, recovery in some profitable FMCG-Others categories, and a reduced lag in the hotels business coupled with lower input cost pressures than peers and attractive valuations make ITC a top pick from a one-year perspective,” the brokerage firm said.
For Q1FY23, the brokerage firm expects 11 per cent volume growth in cigarettes business and expects expansion of gross margin expansion by 190 basis points (bps) YoY on a better cigarette mix and reduction in lag from Hotels. Analysts foresee cigarette volumes, hotel revenues post reopen theme, travel resumption, and agricultural outlook as key themes going ahead.
“ITC has finally breached the longest-awaited psychological level of Rs 300. The conviction comes from the sustainability of stock trading and closing above Rs 300 levels over the past three consecutive sessions. The stock still stands strong above Rs 300, and current levels are ideal to take a position. The support comes near Rs 275-280 levels with a target of Rs 350 levels. The week full of green candles indicates sustainability on the upside,” said Ravi Gangan, Mehta Equities.
The scrip closed at Rs 304.20 on Wednesday, which is Rs 1.75 or 0.58 per cent higher than its last closing on the NSE.
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