CLOSE X
Algo Trading
Home

Blogs

Stock Market Blogs

WILL ITC OUTPERFORM? July 27 2021itc share price, ITC Ltd, ITC stock, ITC shares, I

Visit Count: 125

                  WILL ITC OUTPERFORM?

It all depends upon how management realign the business. Players like Philip Morris has announced that 50% of revenue will come from smokeless products. There has been pressure on the management to demerge various businesses to unlock the value. I suspect that management would soon announce some measures that can lift mood on the counter.

Also, Mutual funds have started increasing stake in the company.

Another reason to support ITC performance is its overall quarterly results which has shown good rise of sales at 13183.21cr and profits at 3343.44cr which led to growth by 26.4% and 30.2% on YoY basis. Operating profits also bloomed by 26.4% at 4890.78cr thus supporting ITC performance.

Profit Trend:

Further If we check the past profit trend of ITC we can see over the years, the profit of the company has continuously rising from 4210.78 in 2010 to 15,593 till 2020.

 


Undervalued among Other FMCG stocks:

Amongst various industries and companies, ITC has comparatively low price earnings of 19.14. While TATA CONSUMER PRODUCTS tops the chart with the high price earnings of 115.



 


Technical reasons: (triangle breakout)

These triangle patterns help in indicating the continuation of bullish or bearish market. They are depicted by drawing trendlines along a converging price range that connotes a pause in the prevailing trend.



 

ITC - Descending Triangle formation in Big Ascending triangle

Positional - Long at CMP 212.5 SL 200, Target 222 & 238

Medium to Long Term - Long at CMP 212.5 SL196, Target 255 & 309

 But even after all the above reasons ITC is underperformed, Why?

Since 2010/11, there has been 20% decline in the volume of legal cigarette industry. Also Selling pressure from the institutional investors is increasing as they did not want to take exposure to liquor and cigarette related business due to ESG norms. Unrelated businesses in a single company also affect the performance.

Further ITC have Poor ROE from the FMCG business because Other businesses of ITC did not contribute as much as they are expected to do.

No new category creation like Maggie, Kurkure and Lays also cause underperformance.


COMMENTS
Categories
Blog Enquiry

Prevent Unauthorized Transactions in your demat and trading account --> Update your Mobile Number/Email id with your Depository Participant and Stock Broker. Receive alerts on your Registered Mobile for all debit and other important transactions in your demat/trading account directly from CDSL and Stock Exchanges on the same day.........issued in the interest of investors...

1. Stock Brokers can accept securities as margin from clients only by way of pledge in the depository system w.e.f. September 1, 2020.

2. Update your Mobile Number & Email Id with your Stock Broker/ Depository Participant and receive OTP directly from Depository on your Email Id and/ or Mobile Number to create pledge.

3. Pay 20% upfront margin of the transaction value to trade in cash market segment.

4. Investors may please refer to the Exchange's Frequently Asked Questions (FAQs) issued by NSE vide. Circular No. NSE/INSP/45191 dated: July 31, 2020 and NSE/INSP/45534 and BSE vide Notice No. 20200731-7, dated: July 31, 2020 and 20200831- 45 dated: August 31, 2020 and dated: August 31, 2020 and other guidelines issued from time to time in this regard.

5. Check your Securities/ MF/ Bonds in the Consolidated Account Statement issued by NSDL/ CDSL every month.

"As per the directives of CDSL and esteemed Exchanges, it has been made mandatory for every client to furnish their latest KYC details viz. Valid Mobile No., Email- Id & Income range on or before 31.05.2021 else your Account will be marked as Non Compliant and will be Freezed till the compliance of such requirement."
REGISTRATION NOS:

INDIRA SECURITIES PVT.LTD. (SEBI REG.NO.):NSE TMID: 12866, BSE TMID: 663, CDSL DPID: 17000 SEBI REG. NO.: INZ000188930, MCX TM ID: 56470, NCDEX TM ID: 01277, CDSL REG. NO.: IN-DP-90-2015, CIN : U67120MH1996PTC160201
INDIRA COMMODITIES PVT. LTD. CIN : U65921MH1995PTC089399

DISCLAIMER:

"INVESTMENT IN SECURITIES MARKET ARE SUBJECT TO MARKET RISKS, READ ALL THE RELATED DOCUMENTS CAREFULLY BEFORE INVESTING."

INVESTORS GRIEVANCE

Manoj Bhandari. Email: compliance@indiratrade.com. Call : 0731-4797275

Investors Grievance Email : complaint@indiratrade.com