In an otherwise sluggish broader market on Monday, shares of ITC Ltd extended gains and rose nearly 2% to cross the ₹400 threshold for the first time. The stock recorded a new 52-week high in Monday's session and closed 1.2% higher.
The stock has been on a bull run since the start of FY23, and it has since gained 20.47%, making it a top performer in the Nifty50 index. Over the past year, it gained almost 48%.
During Monday's session, the stock touched an intraday high of ₹402 and low of ₹392.90. In addition, today's increases brought the company's market capitalisation close to ₹5 lakh crore.
The present rise in ITC shares might be linked to forecasts for better earnings in Q4FY23, as the majority of analysts stayed bullish on the fast-moving consumer goods (FMCG) major in their reports.
"The stock has broken its recent range of ₹375 - 395 on the upside; we expect this outperformance to continue where the prices can continue to move towards ₹415 - 420," said Rajesh Bhosale - Equity Technical and Derivative Analyst, Angel One.
Brokerage houses Morgan Stanley had given ITC an ‘overweight’ rating with the target price at ₹415 per share. Jefferies also had raised its target price on ITC to ₹450 per share.
According to Trendlyne data, the majority of brokerages gave ITC a 'Buy' rating, with long-term average price targets of ₹414.77, a possible increase of 3.4% from the current market price.
With a target price of ₹450, domestic brokerage Sharekhan reiterated its 'Buy' recommendation on the stock, indicating a possible gain of 12% over the current price.
With a rating of 'Accumulate', ICICI Securities has set a price target of ₹420. ITC is anticipated to report a 6.3% revenue gain in Q4FY23, driven by a 15.9% growth in the cigarette industry. Net profit is expected to grow 17.2% to ₹4,911.8 crore, it said.
The government's increasingly sensible approach to cigarette taxation continues to be a significant value-driver for the ITC stock, according to JM Financial, which has reaffirmed its 'Buy' rating with a price target of ₹440.
In an interview with ET Now Swadesh, Kapil Shah, Technical Analyst, Emkay Global and Technical Trainer, Finlearn Academy, said that FMCG sector as is at an all-time high.
The sector has been consolidating for a long time since October 2022 until now. The sector has been in support range of 43,000 and resistance range of 46,000. The index has given a breakout on upside which is positive development. ITC has good momentum building up today.
“Based on our analysis of ITC over several years, we observed the bad patch for ITC is 40 months after which it gets a good momentum. For a long time 370-390 has been range for stock.As stock has given breakout on upside, we expect stock to move upward and until the time it is trading above 390 it should move higher,” said Shah.
