ITC Gets Budget Boost, Shares Jump Over 8% - watsupptoday.com
ITC Gets Budget Boost, Shares Jump Over 8%
Posted 02 Feb 2017 12:53 PM

(Agencies)

Shares of cigarette maker ITC jumped as much as 4 per cent on Thursday after the government proposed a lower-than-expected excise duty hike of 6 per cent for cigarettes across all lengths in the Budget. Including today's gains, ITC shares have rallied over 8 per cent in two trading sessions. The government's proposal to hike excise duty on cigarettes by 6 per cent is the lowest in last six years, say analysts, who were expecting 10-12 per cent hike in excise duty on cigarettes.

Commenting on the Budget's proposal on excise duty hike, Credit Suisse said "best case scenario has played out for ITC" and it is a "clear winner from the Budget".

ITC's cigarette business has been under pressure due to demand slowdown following the government's announcement of demonetisation of high value currencies on November 8, which sucked out 86 per cent of the currencies in circulation and impacted discretionary spending in the economy.

ITC's December quarter net profit grew a marginal 5.71 per cent to Rs. 2,647 crore as demand slowdown following demonetisation impacted its sales. Its revenue from operations grew 4.69 per cent to Rs. 13,570 crore in the October to December quarter, as against Rs. 12,962 crore in the previous fiscal.

As of 9.50 am, ITC shares traded 3.26 per cent higher at Rs. 278.50 on National Stock Exchange compared to a 0.03 per cent gain in its benchmark index Nifty.

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