ITC Gains 6.5% As Cigarettes Remain Untouched by Budget; Is it a Buy Now?

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ITC Gains 6.5% As Cigarettes Remain Untouched by Budget; Is it a Buy Now?

By Aditya Raghunath

Investing.com -- A budget is always a hit or a miss for cigarette-makers. The companies are on tenterhooks as they wait for the inevitable increase in taxes every year. ITC Ltd (NS: ITC ) stock usually goes down on the day/the day after the budget. This time, it didn’t. Finance Minister Nirmala Sitharaman said that this year the conditions were not favorable enough for another hike in GST.

The primary beneficiary of this ‘no-tax increase’ was India’s largest cigarette maker and FMCG giant ITC. The stock gained 6.54% to close at Rs 216.55. This marked a turnaround in the fortunes of the stock as it had continuously fallen from January 18 to January 29, dropping 6% in this time period bracing for the impact of the tax hike.

Investing.com had written about this on January 29, asking investors to exercise caution until the Budget and then take a decision. Centrum Equity Research has assigned a target of Rs 353 for the stock and has recommended a strong ‘buy’ on it. It is expected that other brokerage firms and analysts will also re-rate ITC stock up as it looks like the stock might have over-corrected in the budget run-up.

Apart from ITC, other cigarette stocks like VST Industries Ltd. (NS: VSTI ) (up 2.06%), Godfrey Phillips India Ltd. (NS: GDFR ) (up 0.83%) and Golden Tobacco Ltd (NS: GLDN ) (up 7.94%) also saw their prices go up.

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  • Rakesh Prasad @Rakesh Prasad
    The most unethical company on planet. Does ITC has idea how many people killed becoz of cigrette.
    Like 1
    • Susheel Goyal @Susheel Goyal
      @Rakesh Prasad So why people going to buy the cigrette? ITC don’t go to their home or call them to buy it. If you have control on your habit, no body can force you for anything. Why blame others for your weekness.
      Like 15
    • tomy george @tomy george
      Dear Mr. Rakesh Prasad, what ethics are there with Distilleries or Breweries and liquor shops running in our country  ? Why do you catch hold of the neck of ITC only  ?
      Like 3
    • Jayessh Harpalani @Jayessh Harpalani
      No one is forcing anyone to smoke. Its voluntary
      Like 0
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  • Yogesh Chindarkar @Yogesh Chindarkar
    Is this stock increase in future?
    Like 1
    • Godwin Dsouza @Godwin Dsouza
      yes it will
      Like 1
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  • tejas patel @tejas patel
    Target 300
    Like 5
    • tejas patel @tejas patel
      Strong buy
      Like 2
    • Janki Patel @Janki Patel
      in how much time it will touch 300 and in this month how much it can gain?
      Like 0
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  • Vikas Sethia @Vikas Sethia
    Itc hi baki hai
    Like 4
  • neeraj gupta @neeraj gupta
    Waiting for ITC turn for the last 3 years
    Like 8
    • Mohan Singh Meena @Mohan Singh Meena
      ur wait is now over
      Like 2
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