ITC Gains on Change of Guard in Health Ministry

Shares in cigarette manufacturer ITC jumped 2.5 per cent on Monday as traders said the removal of Dr Harsh Vardhan from the Health Ministry is a positive for the tobacco industry. Dr Harsh Vardhan was shifted to the more low-key Science and Technology and Earth Sciences Ministry in the Cabinet reshuffle announced on Sunday.. ITC, which is the most influential stock in the Nifty, was among the top gainers in morning trade and helped the blue chip index register a record high in morning trade. The stock has underperformed the broader markets over the last six months because of a clamp down on the tobacco industry.. Over the last five months, Dr Harsh Vardhan took several steps to curb India's tobacco consumption. Taxes on tobacco products have gone up and companies have been ordered to print more health warnings on packages. Recently, the Health Ministry was also considering a ban on electronic cigarettes and sale of single conventional cigarettes. While most e-cigarettes are imported and sold by small firms, India's largest cigarette maker ITC started selling the devices in August.. Indians smoked more than 100 billion cigarettes in 2012, according to Euromonitor International, and it is common for vendors to sell them individually. A single cigarette costs about Rs. 10 in Delhi as compared with a pack of 20 that costs Rs. 190.. ITC shares have gained just 0.6 per cent in the last six months as compared to a 17 per cent gain in the broader Sensex over the same period. Now, there is hope for the stock. Market analyst TS Harihar said ITC could gain 5-10 per cent in the short term.. Political commentator Sudheendra Kulkarni told NDTV that Dr Harsh Vardhan was an ideal person to head the Health Ministry, so his removal was surprising.. "He took many initiatives... The anti-tobacco campaign is extremely important to take on the threat of cancer in India," he said.. Up to 9 lakh Indians die every year of tobacco-related diseases, and that number could reach 1.5 million by 2020 if users do not kick the habit, the International Tobacco Control Project estimates.. ITC shares ended 4.08 per cent higher at Rs 370.15 apiece on Monday and was also the top gainer in Nifty. However, other tobacco companies such as Godfrey Philips and VST Industries ended with losses of 4.3 per cent and 0.45 per cent respectively.. (With inputs from Reuters)

ITC Gains on Change of Guard in Health Ministry

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