After rising over 4% last week, ITC shares are witnessing some profit booking. The FMCG stock declined by almost 1% in intraday trade on Monday, February 23, despite positive market sentiment. ITC share price opened unchanged at ₹327 against its previous close, and dropped 0.80% to an intraday low of ₹324.40 on the NSE. Meanwhile, equity benchmark Nifty 50 climbed 0.80% to an intraday high of 25,771 today.
ITC share price trend
ITC shares hit a 52-week low of ₹302 on February 2. However, it started witnessing mild buying after that amid reports of cigarette price hikes.
The stock is up about 1.5% for February so far after suffering losses for the last three consecutive months. In January, the stock tumbled 20% due to a hike in cigarette taxes. Over the last year, the stock has lost over 18%.
An additional excise duty on cigarettes and other tobacco products, over and above the highest 40% goods and services tax (GST) rate, took effect on 1 February.
Is it the right time to buy ITC shares?
Experts largely appear positive about the stock for the long term. However, some remain cautious due to uncertainty about the impact of this increase in cigarette prices on volume.
Vinit Bolinjkar, the head of research at Ventura, highlighted that ITC has shown significant resilience following the steep excise duty hikes announced earlier this year.
While the tax increase on cigarettes (ranging from 20% to 55% depending on size) initially spooked the market, the company’s strong pricing power has become the primary narrative.
Bolinjkar said by implementing price hikes of approximately 20%–40% across key brands, ITC is expected to offset the majority of the tax impact, protecting its margins.
According to him, long-term growth prospects are positive, fueled by urban consumption recovery, hotel segment revival (occupancy >70%), and expansion into non-cigarette FMCG (targeting ₹1 lakh crore revenue by 2030). However, regulatory risks (e.g., tobacco taxes) and commodity inflation pose challenges.
Bolinjkar recommends buying ITC stock for a target price of ₹415 due to attractive valuations (P/E nearly 19 times), high dividend yield (nearly 4.4%), and successful pass-through of tax hikes.
On the other hand, Nandish Shah, AVP-PCG Research and Advisory, (Fundamental) Wealth Management, Motilal Oswal Financial Services, has a “neutral” view on the stock with a target price of ₹365.
Shah highlighted that ITC’s core cigarette business saw steady performance in Q3, and the FMCG business saw a healthy performance with strong growth in operating profit.
However, the recently announced changes in GST and excise duty have led to a steep increase in cigarette taxes, effective 1st February 2026.
“We downgraded ITC from buy to neutral after the announcement. Recently, we have seen that cigarette companies have taken a price increase to pass on the increase in taxes; however, the volume impact of this increase is yet to be seen. ITC has a full cigarette portfolio to better navigate the tax increase, but competitive pressure from illicit cigarettes will take a toll on the formal cigarette industry,” Shah said.
ITC shares: Technical view
Jigar S. Patel, Senior Manager of Equity Technical Research at Anand Rathi Share and Stock Brokers, pointed out that ITC share price is currently trading within the 50%–61.8% Fibonacci retracement zone of the major rally from the COVID low to the September 2024 top, as highlighted on the chart.
This retracement area typically acts as a strong demand zone, indicating that the stock may undergo a phase of consolidation before its next directional move.
According to Patel, the stock’s price action suggests a probable range-bound movement between ₹335 and ₹300 in the near term.
“Momentum indicators such as RSI and other oscillators are hovering in heavily oversold territory, signalling exhaustion in selling pressure and the possibility of a gradual pullback. Considering the confluence of technical support and oversold readings, the strategy would be to accumulate ITC in the ₹335–305 zone,” said Jigar S. Patel, Senior Manager of Equity Technical Research at Anand Rathi Share and Stock Brokers.
“The upside target is projected near ₹385, while maintaining a strict stop loss below ₹285 on a closing basis. The investment horizon for this setup is approximately 3–4 months,” said Patel.
Read all market-related news here
Read more stories by Nishant Kumar
Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
About The Author
