Stock Of The Day: ITC Logs Biggest Jump In Almost Four Years—Analysts View, Key Levels To Watch
Everything about BAT's plan to pare stake in ITC.
ITC Ltd.'s largest public shareholder, British American Tobacco Plc, launched a block trade to sell 3.5% of its stake or 43.7 crore shares of the company. The impending share sale will reduce BAT's share from 29% to approximately 25.5%.
BAT will encounter a mandatory 180-day waiting period before it can consider reducing its stake further.
In a statement, the British cigarette maker said it will sell 43.69 crore shares, or 3.5% stake, of ITC. One of the large trades in ITC stock shows the same amount of shares changing hands at a price of Rs 439 apiece, for a total value of Rs 19,180 crore, as per Bloomberg data.
Shares of ITC jumped over 8% during morning trade, the highest jump since April 2020, propelling the benchmark index, Nifty50, by 50 points.
Key Levels To Watch
Resistance level: Rs 429.3 (one-month high).
Support: Rs 399.4 (one-month low).
Nuvama's Take On Passive Fund Inflow
In terms of passive flows, Nifty 50 is expected see an inflows of Rs 538 crore, according to Nuvama. This is equivalent to approximately 1.3 crore shares, with a projected volume impact lasting 0.9 days.
For S&P BSE Sensex 30, an inflow of Rs 315 crore is estimated, translating to about 0.7 crore shares, alongside a volume impact lasting 0.5 days.
Nuvama does not foresee any increase in weight within global passive indices.
Street View
Morgan Stanley has an 'overweight' rating on the stock, with a target price of Rs 491 apiece.
HSBC has a 'buy' rating on ITC, with a target price of Rs 480 apiece.
Morgan Stanley foresees the stock's outperformance to resume, on the back of favorable tax environment, non-cigarette business growth, and reasonable valuations.
HSBC expects stable Ebit margins and the drop in the stock price following the announcement by BAT enhancing attractive valuation.
The brokerage anticipates a persistent taxation overhang, but views moderate tax increases favorably, expecting the cigarette business to maintain a low-growth trajectory.
Of the 37 analysts tracking the company, 34 maintain a 'buy' rating, two recommend a 'hold', and one suggests a 'sell', according to Bloomberg data. The 12-month analysts' price target implies an upside of 15.5%.
