ITC Shares Fall As Hotel Business Spinoff Plan Is 'Back On The Table'

Shares of ITC Ltd. fell the most in over a week on Tuesday, as the company revived its plan to carve out the hotels business since the sector has recovered from the pandemic's lows.

The conglomerate was looking for an "alternative business structure" for its hotel business, ITC Chairman Sanjiv Puri said in an interview with Hindu BusinessLine. ITC's plans to spinoff its hotel businesses had been shelved since the pandemic. Recovery in its hotel business after the pandemic was the primary reason for the demerger proposal to be "back on the table", Puri said.

Shares of ITC Ltd. fell 1.80% intraday before paring losses and trading at a low of 0.56% to Rs 446.6 apiece as of 10:15 a.m. That compares with a 0.31% advance in the Nifty.

The stock declined the most in over one week since May 19. Total traded volume stood at 1.6 times its 30-day average. The relative strength index was at 72, implying that the stock may be overbought.

Out of the 38 analysts tracking the company, 34 maintain a 'buy' rating and four recommend a 'hold' on the stock, according to Bloomberg data.

The average 12-month consensus price target implies a potential upside of 4%.