ITC share price touches record high of Rs 394 in volatile market; what should investors do?

ITC share price today BSE NSE record high: The stock of the cigarettes-to-hotels conglomerate scaled a record high on Thursday, February 23. ITC shares gained by Rs 10.1 or 2.6 per cent at the strongest level of the day to an all-time high of Rs 393.9 apiece on BSE. 

The stock of ITC — whose popular cigarette brands include Wills Navy Cut and Gold Flake — traded in huge volumes. By around noon, as many as 7.9 lakh ITC shares changed hands on BSE so far on Thursday as against a daily average of 3.5 lakh in the past two weeks, as the cigarette manufacturer's stock held inches to the record high, according to exchange data.

What analysts suggest investors should do on ITC shares

"ITC still looks very good," AK Prabhakar, Head of Research at IDBI Capital Markets, told Zeebiz.com. 

One can take a buy-on-declines approach on ITC, he said. 

ITC shares have rewarded investors with a return of 16 per cent in the past one month alone, sharply outperforming the Nifty50 benchmark, which has remained flat.

"ITC was a major underperformer between July 2017 and March 2020, and has finally decided to play catch-up and outperform while the rest of the FMCG pack has gone nowhere," Hemen Kapadia of KRChoksey told Zeebiz.com. 

"After such a scintillating move, it would be prudent to be a bit cautious and accumulating makes sense on declines only or on an instalment basis," Kapadia added.

Brokerages have lined up targets as high as Rs 460 for ITC. 

ITC Q3 results and dividend

ITC shares began trading ex-dividend last week. The cigarette maker had announced a dividend of Rs 6 per share with a record date of a record date of February 15. 

The ITC dividend will be paid between March 3 and March 5. 

Earlier this month, ITC beat analysts' estimates with a 21 per cent year-on-year jump in net profit to Rs 5,031 crore for the quarter ended December 2022, and a 2.9 per cent increase in revenue to Rs 17,122.2 crore. 

According to Zee Business research, ITC's net profit for the three-month period was pegged at Rs 4,699 crore and revenue at Rs 16,652 crore. Read more on ITC results

ITC reported a 16.7 per cent increase in revenue from its cigarette unit to Rs 7,288.2 crore, Revenue from other FMCG products grew 18.4 per cent to Rs 4,841.4 crore, and from hotels expanded 50.5 per cent to Rs 712.4 crore. 

A look at how much money ITC generates from different segments including cigarettes and other FMCG products, and hotels  

Cigarette tax  

In the Union Budget 2023, the government proposed to increase certain taxes on cigarettes. 

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