Cigarette maker ITC Ltd. is trading near record highs and at a premium to its historical 10-year price-to-earnings average. Yet, the stock continues to be the cheapest in the fast moving consumer goods basket.
ITC is trading at 31.8 times its PE ratio for the trailing 12 months compared to more than 40 times for its peers.
Nearly 94 percent of the analysts polled by Bloomberg have a ‘buy' rating on the stock.
Brokerage IIFL upgraded the stock to ‘buy' after the government announced a cap on the cess on tobacco products under the Goods and Services Tax, allaying fears that ITC may have to pay higher taxes under the new indirect tax regime.
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