ITC

ITC Takes a Victory Lap After Budget: No Tax Changes, Big Gains!

ITC shares soar over 5% as Finance Minister assures no tax hike on tobacco. Is it party time for investors?

In a surprising turn of events during Union Budget 2024, the share price of ITC spiked over 5%, solidifying its position as one of the most resilient stocks amidst market fluctuations. Finance Minister Nirmala Sitharaman announced in her budget speech that there would be no changes in the taxation of tobacco products, which provided a breath of fresh air to companies in the sector like ITC. Investors rejoiced, nudging the stock closer to its all-time highs since last July. With tax shocks averted, the business landscape seems to be in a celebratory mood.

The relief came as a boon not just for ITC, whose diverse portfolio ranges from cigarettes to hotels, but also for several other FMCG companies like Tata Consumer Products and Hindustan Unilever, which saw significant gains as well. As the Sensex appeared to wobble, these firms stood out as top gainers. ITC shares are now trading with exciting momentum, up approximately 6.5% on the day! Clearly, the ride on the stock market can often resemble a rollercoaster, but ITC seems to have clicked into a smoother trajectory.

However, it wasn't just the budget announcement that fueled ITC's impressive performance; Jefferies India also played a significant role by upgrading their rating on ITC from 'hold' to 'buy', increasing their target price to Rs 585. This positive feedback from a leading financial services firm adds an extra layer of validation for investors, who might have been hesitant in the past due to the health concerns surrounding tobacco products. In this financial wilderness, ITC’s stock is thriving like a cactus in the desert!

As the dust settles on the budget's impact, it remains essential to keep a close eye on ITC's future performance and the corporate strategies they may employ moving forward. With the Indian government emphasizing the agriculture sector with a hefty allocation of Rs 1.52 lakh crore, it remains to be seen how ITC may diversify its product offerings to align with national interests while still reaping rewards from tobacco.

Did you know that ITC is an acronym for Indian Tobacco Company? Established in 1910, it has evolved from its humble beginnings into a multi-business conglomerate with a presence in hotels, paperboards, packaging, and more. Also interestingly, ITC has scored accolades for its commitment to sustainability and green practices, leading to numerous certifications which highlight its attempts to adapt and flourish in a competitive landscape.