1:10 Stock Split: FMCG ITC Share Hits New All-Time High, Biggest Winner Of Budget; Jefferies Upgrade To Buy

FMCG giant ITC Ltd has reclaimed its position as the largest tobacco company in the world after its share price went skyrocketing so much so that it touched a new all-time high. ITC share crossed the Rs 500 mark. The reason for the rapid bull run in ITC stock price comes after the Union Budget announcement for FY25 by the PM Modi-led government. The optimism went multi-fold when tobacco ingredients were untouched by any tax restructuring. And in brokerage Jefferies' words, no news on that is great news for ITC.

ITC is said to be the biggest winner of Union Budget FY25 changes.

ITC Share Price:

This FMCG stock crossed Rs 500 for the first time on July 24 and touched a new all-time high of Rs 510.60 apiece in the trading hours before correcting. After closing hours, investors also cashed in profits, leading ITC stock to end at Rs 494.05 apiece, marginally up.

ITC stock which was in red in YTD till last week, has made a sharp rebound and has returned in the green zone. So far in 2024, ITC stock has rallied by 6%. In a year, the stock's gains are about 7%.

The stock's PE ratio is at 30.20x and the return on equity is at 28.27%.

ITC Share Price Jefferies Upgrade:

Brokerage Jefferies has upgraded its stance in ITC from 'HOLD' to 'BUY'. In its note, the brokerage stated that 'No news is great news'.

While upgrading ITC stock to buy, Jefferies stated that it is a clear winner with the government leaving tobacco taxes unchanged.

With clarity on cigarette taxation, Jefferies now believes that ITC is well-placed to accelerate cigarette revenue growth through a blend of volumes, price hikes and a better mix of input costs.

The last time hike on tax related to tobacco was 2% in February 2023, and Jefferies believes this should enable ITC to focus on volumes by opting for minimal product price hikes. Jefferies expects goods and services tax to stay stable until March 2026, which is till central government settles its states' dues. However, Jefferies also added that if there is a modest price hike this year, it will set a base for next year.

Jefferies sets a target price of Rs 585 on ITC.