Jefferies has upgraded ITC to ‘Buy’ with highest price target of ₹585. This follows the government’s decision to leave tobacco taxes unchanged in the latest budget, providing a boost to ITC, which relies heavily on cigarette sales.
What did FM say on tobacco taxation?
Finance Minister Nirmala Sitharaman announced no changes to tobacco taxation in her budget speech. This decision comes after last year’s 16% hike in National Calamity Contingent Duty (NCCD). ITC’s share price surged over 5% on Tuesday, making it one of the top performers on the Nifty 50 and Sensex indices.
ITC Stock Update –
ITC shares opened at ₹467.05 on the BSE, reaching an intraday high of ₹497.40 and a low of ₹466.55. Nifty FMCG gained 3.03%, with ITC leading the index. The stock ended 6.52% higher at ₹496.95 on NSE.
The stable GST rates, likely to remain unchanged until March 2026, further support ITC’s positive outlook. Additionally, a modest price hike this year is expected to set a solid base for next year. An expected revival in rural demand, spurred by a 12% increase in the Union Budget’s rural allocation, is another positive factor for ITC. This will benefit the company’s non-tobacco businesses, such as FMCG and agriculture. Jefferies has also revised ITC’s earnings per share (EPS) upward by 1-2%.
