The stock hit a high of Rs 237.30 before slipping to the Rs 235 level at around 9.45 am (IST) on BSE. The counter is very close to its 52-week high of Rs 239.15 hit in February, which also remains a big technical hurdle.
The sudden gain in the last two days has helped the stock see price and volume breakouts, opening up the possibility of a further 15 per cent gain. Investor appetite for the cheaply-valued stocks in an otherwise expensive market is a major reason behind ITC’s rise.
The stock trades at 20.80 times its earnings, which is at a sharp discount to its FMCG peers. Hindustan Unilever, for instance, trades at 80 PE and Britannia Industries at 57 times its earnings.
Shares of
have gained 75 per cent from its low of Rs 134.95 hit on March 13, 2020. But it has underperformed the 30-share benchmark, Sensex, which has rallied over 130 per cent from its March lows.
The stock’s underperformance has resulted in valuations remaining below its long-term averages, a rarity for a blue chip in a market that has seen a broadbased rally in past pas18t months.
Rajesh Palviya, head of technicals and derivatives at Axis Securities, said if ITC manages to cross Rs 240, it would touch 265.
Fundamental analysts have been largely bullish on the counter. It is a consensus ‘buy’ for 34 analysts. Only one analyst believes you should ‘sell’ the stock.
The Refinitiv database showed the median price target for the stock is around Rs 250, meaning a potential upside of about 11 per cent from the last trading price. The highest target price is Rs 345 and the lowest Rs 198.
