Shares of FMCG major ITC have been attracting strong buying interest in the last one year. The stock hit its 52-week low of ₹204.50 on August 26, 2021, and since then, it has been gaining, outperforming the benchmark Sensex.
In the last one year, the stock has jumped more than 51% while the benchmark Sensex has gained 5%.
The FMCG major met market expectations on the front of new quarterly earnings. ITC reported a 33.46% increase in consolidated net profit to ₹4,462.25 crore for the first quarter that ended June 30, 2022. It had posted a net profit of ₹3,343.44 crore during the April-June quarter of the previous fiscal.
Its revenue from operations was up 39.25% at ₹19,831.27 crore in the first quarter of the current fiscal compared to ₹14,240.76 crore in the year-ago period.
While the stock trades near its fresh 52-week high, is there more steam left in it?
We talked to fundamental and technical analysts about the prospects of the stock and this is what they have to say:
Fundamental views
Analyst: Tirthankar Das, Technical & Derivative Analyst- Retail, Ashika Stock Broking
For Q1FY23, ITC posted encouraging performance with about 26% cigarette volume growth and margin expansion across cigarettes, paperboard and hotels business.
The FMCG division reported healthy 19.5% growth, including a significant impact of price hikes across the portfolio. The other business division including hotels, paper and agriculture have also done well during the quarter.
ITC is better placed in the consumer universe to tackle an adverse market situation. The company is leveraging its extensive portfolio and network to drive recovery and gain market share from smaller players, thus further cementing its position.
Technical views
Analyst: Jigar S. Patel, Sr. Manager - Equity Research, Anand Rathi
On the monthly scale, the counter has recently broken its all-time high of ₹305.60. The level of ₹300 may be credible support in coming sessions.
On the technical front, monthly RSI and monthly stochastic, both have entered the overbought zone which is very positive for it.
The monthly average directional movement index is at the 33 level, which is adding further confirmation for the upside. So, fresh buying at the counter is advisable around ₹300-305 and one can expect an upside till ₹350.
Analyst: Santosh Meena, Head of Research, Swastika Investmart
ITC is in strong bullish momentum and has witnessed a vertical rise followed by a breakout of ₹240 level. However, it is approaching its key hurdle of ₹325, therefore, there is a risk of profit booking and momentum indicators are also showing an overbought reading.
If it starts to correct from the ₹325 mark then the ₹290-280 area will be a good buying opportunity while the downside looks protected in the ₹270-260 zone if there will be any major correction.
It is trading well above its 100 and 200-DMA, therefore, a mean reversion can't be ruled out. On the upside, if it manages to take out ₹325 level then ₹350-360 will be the next target area.
According to a MintGenie poll, an average of 35 analysts have a ‘strong buy’ call on the stock.
Disclaimer: The views and recommendations are those of individual analysts or broking firms, not MintGenie.
