ITC Dethrones HUL To Become No. 1 Consumer Stock

Asia’s largest cigarette maker ITC Ltd. is set to reclaim its position as India’s most valuable fast-moving consumer goods stock after ousting Hindustan Unilever Ltd. from the spot.

INDIA - JULY 16: Cigarettes made by ITC Ltd., are displayed at a stall in New Delhi, India on Sunday, July 16, 2006. ITC Ltd., which sells seven of every 10 cigarettes in India, may say first-quarter profit rose 19 percent on higher cigarette sales and hotel occupancy. (Photo by Amit Bhargava/Bloomberg via Getty Images)

Asia’s largest cigarette maker ITC Ltd. is set to reclaim its position as India’s most valuable fast-moving consumer goods stock after ousting Hindustan Unilever Ltd. from the spot.

ITC, which primarily makes money by selling cigarettes but also holds interests in hotels, paper and consumer staples industries, saw its valuation jump above 6.1 trillion rupees ($74 billion) for the first time ever on an intraday basis Monday, surpassing Hindustan Unilever’s 6.09 trillion rupees. The cigarette maker has rallied more than 70% in the last 12 months to outperform all other Nifty 50 stocks.

Investors’ preference for ITC over Hindustan Unilever is due to the outlook for earnings. While HUL continues to suffer from an anemic post—pandemic recovery in rural Indian sales, ITC’s diversified business interests helped boost its earnings per share by about 30% in the year ended March.

“ITC will definitely outperform HUL in the near-term,” said Sachin Bobade, vice president - consumer sector at Dolat Capital Market Ltd. “There is still juice left in ITC mainly because its cigarette business has no major headwind.”  

ITC’s market capitalization last surpassed HUL’s four years ago.

--With assistance from Ashutosh Joshi.

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