ITC’s Climb To A Record High Shows Investor Hunt For Stability
(Bloomberg) -- Shares of Indian conglomerate ITC Ltd. have climbed to a record high, demonstrating investors may be starting to focus on stability in a market churning with concerns over corporate governance.
It's the best-performing stock in the NSE Nifty 50 Index with a 15% gain this year, pushing its market value to nearly $57 billion. Its climb has accelerated this month, as US short seller Hindenburg Research's allegations against the Adani Group has made Adani Enterprises Ltd. and Adani Ports & Special Economic Zone Ltd. the index's worst performers.
“ITC's stable cash flow and dividends have won hearts of investors in this volatile environment amid Adani's troubles and inflation,” said Sameer Kalra, founder of Target Investing in Mumbai. “The company is also expected to unlock value its non-cigarette businesses.”
ITC — whose operations range from tobacco to food and hotels — has one of the highest dividend yields and returns-on-equity among Nifty members. It also ranks top in a Bloomberg Economics analysis of governance, liquidity and leverage at Indian conglomerates. Tech Mahindra Ltd., a software services provider with similar characteristics to ITC, is the Nifty's second-best gainer year to date.
Adani Crisis Likely to Leave India's Conglomerates Unscathed
India investors are increasingly drawn to stable returns. Dividend yield has been the top-performing strategy for a long-short portfolio of the nation's blue chips this year, while price-target changes and earnings revisions rank top over 10 years, according to data compiled by Bloomberg.
Amid this search for stability, ITC's gains have been pronounced, driving the stock up more than 75% in the past year. The surge in investor attention marks a big change with a couple years ago, when social-media memes lampooned the company's stock as boring after years of stagnation and scrutiny of global tobacco businesses.
ITC has gotten a further boost from stronger-than-expected third-quarter earnings due to better performance in its cigarette business and a recovery in its hotels segment.
(Adds more context throughout)
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.
-
India Exports Capital. Why Not Export Trusteeship?
The big question, then, is whether India can build an institution that global borrowers, investors, banks, and lawyers can trust, even without an Indian connection.
-
France's Economy & Politics Are In Crisis | The Reason Why
Let's look at how the French economy and politics evolved under Nicolas Sarkozy, Franois Hollande and Emmanuel Macron.
-
You May Inherit The Business. You Must Earn Its Credibility.
Succession tests the founder's ability to share authority as much as it tests the next generation's readiness to assume it.
-
Signing Deals Is One Thing; Making Them Work Is Another | The Week In Whys
Sometimes, things don't turn out as planned. Indian companies have lost some bids to rivals, some projects won't produce until 2030.
-
FOMC Wall, PERM Suspension, Hospital Stocks | Talking Points This Week
A PERM suspension would directly affect green-card sponsorship rather than H-1B visas, so the near-term earnings impact could remain relatively limited. The key question is whether this marks a new phase in US scrutiny of Indian IT.
-
Everything, Everywhere, All At Once: Dalal Street's Week To Forget | Joining The Dots
Visa curbs, a Starlink spat and cancer drug caps: what connects this week's shocks for Indian markets
-
India Is Going Abroad For Critical Minerals. But It May Take Years To Pay Off | The Reason Why
Although India's steps are in the right direction, they remain modest compared with India's growing dependence.
-
When Everyone Has AI, What Gives You An Edge?
India's young workforce is entering an uncertain world of work where powerful AI tools are becoming widely accessible. The advantage will belong to those who combine deep expertise with digital fluency, and the distinctly human capabilities that technology cannot manufacture.
-
Wrong Labels, High Pesticide Residues Holding Back Agri Exports | The Reason Why
India needs stronger domestic food-safety and labelling standards, with best practices becoming part of everyday business for farmers, traders and food companies.
-
India Is Easy To Enter, Harder To Attract | The Week In Whys
The question is no longer just whether India can attract companies and capital. It is how much value they create here, how deeply they invest, and whether India remains relatively attractive when they have plenty of other options.
