ITC surges 5% on reports of potential investment from an e-commerce titan

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ITC surges 5% on reports of potential investment from an e-commerce titan
BCCL
  • Shares of consumer products company ITC surged as much as 5% on Thursday hitting its 52-week high at ₹261.80.
  • The company’s stock is known for its massive underperformance over the years as in the last five years ITC has gained just 7% while benchmark index Sensex went up 120%.
  • Analysts believe the stock deserves better valuation following its poor stock performance over the years.
Cigarettes-to-biscuits conglomerate ITC has been surprising investors with a rally in its shares in the last one month.

Media reports indicate that e-commerce giant Amazon is planning to invest in ITC’s e-Choupal and this seems to have triggered the stock on Thursday. Shares of the company have gained as much as 5% hitting its 52-week high at ₹261.80 on October 14.
ITC surges 5% on reports of potential investment from an e-commerce titan
Flourish chart

Farmers use e-Choupal to order seeds, fertilisers and aquaculture products like soybeans, wheat, coffee, and prawns from ITC or its partners at prices lower than those available from village traders.

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Shares of ITC have gained 19% in the last one month, thanks to the rally in stock from September 16.

A believe that the company’s cigarette business will fully recover with the aggressive vaccination drive and reduction in COVID-19 cases.

“Overall, we expect ITC to see strong acceleration in earning growth led by the cigarette business. Earnings per share growth is likely to be in double-digits in both FY22 and FY23, reportedly said analysts at Jefferies while recommending a “BUY” rating on the stock with a target price of ₹300.

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ICICIdirect has set a target price of ₹260 on the stock as it stated that the stock witnessed noteworthy delivery volume activity in September.

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