ITC hits new lifetime high
Shares of ITC, a fast moving consumer goods company (FMCG), is trading 1% higher at Rs 253, also its lifetime high, in an otherwise weak market on the National Stock Exchange. The stock has outperformed the market by rising 27% so far in 2012, compared to a 10% rise in benchmark Nifty.
According to media reports the company has test launched 64mm cigarettes priced at Rs 3.5 per unit in Uttar Pradesh and Bihar. However, the longer 69 mm cigarette is priced at Rs 4, reports suggest.
Analysts expect the step up from bidis to the 64 mm cigarettes will drive growth for the tobacco major. The move was expected as there is a tax differential of 40% between the 64-mm and the 69-mm cigarettes, while the 64 mm range is priced at a significant discount.
Meanwhile, analyst at Angel Broking, expect ITC to report a top-line and bottom-line compound annual growth rate (CAGR) of around 17% over FY2012-14, driven by the company’s diversified business model and ability to invest in growing businesses.