ITC share price record high 2024

ITC Share Price Hits Record High Post-Union Budget 2024

The share price of ITC Ltd., a major player in the FMCG sector, reached a record high following the Union Budget 2024. The stock saw a significant rise of 3.76%, hitting ₹510.60, up from the previous close of ₹492.05 on the BSE. The day also marked the first time ITC shares crossed the ₹500 mark intra-day, driven by positive investor sentiment following the Budget announcements.

Share Price Performance

On Wednesday, ITC shares surged 3.76% to a peak of ₹510.60. A total of 9.94 lakh shares were traded, amounting to a turnover of ₹50.04 crore. The market capitalization of ITC climbed to ₹6.21 lakh crore. Notably, the stock had fallen to a 52-week low of ₹399.30 on March 12, 2024, showcasing a robust recovery.

Technical Analysis

Beta: ITC stock has a one-year beta of 0.6, indicating relatively low volatility.
Relative Strength Index (RSI): The RSI stands at 79.3, suggesting that the stock is in the overbought zone.
Moving Averages: ITC shares are trading above the 5-day, 10-day, 20-day, 30-day, 50-day, 100-day, and 200-day moving averages, indicating strong upward momentum.

Factors Driving the Surge

Stable Tobacco Taxation

The Union Budget 2024 did not increase the tax on tobacco, which is a significant revenue driver for ITC. This stability in tobacco taxation alleviated concerns among investors, contributing to the stock’s rise.

Rural Development Initiatives

The Budget’s focus on rural development also boosted investor confidence. Finance Minister Nirmala Sitharaman allocated ₹1.52 lakh crore for agriculture and allied sectors for the fiscal year 2024-25. The increased rural allocation by 12% is expected to spur rural demand, benefiting ITC’s non-tobacco businesses, including FMCG and agriculture.

Brokerage Insights

Macquarie

Brokerage firm Macquarie initiated coverage on ITC with a price target of ₹535, giving it an “outperform” rating. Macquarie highlighted the growth potential in ITC’s cigarette business and projected that the company’s non-cigarette Earnings Before Interest and Tax (EBIT) could rise to 35%-40% of the overall EBIT in the next decade, up from the current 20%.

Jefferies

Jefferies upgraded ITC’s stock rating from “hold” to “buy” and increased its price target to ₹585 from ₹435. This upgrade reflects Jefferies’ positive outlook on ITC’s growth prospects in both its tobacco and non-tobacco segments.

Conclusion

ITC’s stock has shown a remarkable performance following the Union Budget 2024, driven by stable tobacco taxation and significant allocations for rural development. The company’s strategic focus on expanding its non-tobacco business segments, combined with positive brokerage reviews, positions ITC for sustained growth. Investors should consider these factors when evaluating ITC’s potential as a long-term investment.

FAQs

Q1: Why did ITC’s share price rise after the Union Budget 2024?

A: ITC’s share price rose due to no increase in tobacco taxes and substantial rural development allocations, which boosted investor confidence.

Q2: What is the significance of ITC’s stock crossing the ₹500 mark?

A: Crossing the ₹500 mark is a significant milestone, indicating strong investor sentiment and robust market performance.

Q3: How does the technical analysis view ITC’s current stock performance?

A: The technical analysis shows ITC’s stock is in the overbought zone with an RSI of 79.3 and trading above all major moving averages, indicating strong upward momentum.