ITC’s results have been better than expected on many parameters. Even after that the stock is rangebound. Although the stock of ITC has been looking range bound for a long time, but it is expected to breakout further.
ITC Stock Strategy: Despite the good quarterly results, ITC shares are not seeing much action. The stock seems to be trading around its Thursday’s closing price of Rs 234. However, experts believe that the company’s results have been better than expected on many parameters. Even after that the stock is rangebound. Although the stock of ITC has been looking range bound for a long time, but it is expected to breakout further. There has been growth in the company’s cigarette business and FMCG business. The government has not imposed any tax on cigarettes in the budget this time. At the same time, due to inflation, cigarette prices may increase. All these will be beneficial. For the next few days, the level of Rs 245 will be important for the stock. If this break happens, then the stock can show a level of up to Rs 300.
Level One Critical Supply Zone of 240-245
Swastika Investmart Ltd. Head of Research, Santosh Meena says that technically the level of 240-245 is a critical supply zone for ITC, while the 100-DMA of the level of 228 is an immediate support. Below this, an important support zone is visible at the level of 221. The 210-200 level has long been a strong base for the stock. If the stock goes below it, then weakness in it can increase. On the upside, if it is successful in breaking the level of Rs 245, then it can show the level of Rs 265/300 further.
He says that the company’s results have been better. Talking about earnings, it has been better than expected on many parameters. But even after that, there has been no significant movement in the stock. Anyway it has been rangebound for a long time. Talking about the budget, the government has not increased any tax on the price of cigarettes. This is a big positive trigger for the company.
Why stock can see growth
Brokerage house ICICI Securities also believes that the December quarter has been better for ITC. The performance has been better in every segment. The brokerage has advised ADD in the stock and has given a target price of Rs 260 against current price of Rs 234. The brokerage says that the stock can get the benefit of Expectation of Value. At the same time, the way inflation has increased, the prices of cigarettes are expected to increase. If the government has not increased any tax on cigarettes, then it will also benefit. The company’s FMCG business has also seen growth. At the same time, the outlook of the hotel business is also better. The company can increase the market share in the cigarette business.
Results at a glance
ITC’s profit grew 12.7 per cent to Rs 4156.20 crore in the December quarter. The company had a profit of Rs 3687.88 crore in the same quarter a year ago. ITC, which does business from cigarettes to hotels, has earned an income of Rs 18,365 crore during this period. The company has announced to pay Rs 5.25 per share in the current fiscal year.
(Disclaimer: Stock investment advice is given by the brokerage house. These are not the personal views of The Financial Express. Markets are risky, so take expert opinion before investing.)
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