InvestorQ : What was the reason for the sharp rally in ITC on 12 October, Monday?
Aashna Tripathi made post

What was the reason for the sharp rally in ITC on 12 October, Monday?

Answer
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Aditi Sharma answered.
2 weeks ago


On Monday, 12 October, ITC rallied nearly 4.37% after a long time to touch Rs.175.20 on the BSE. The sharp rally was triggered by reports that global brokerage house, CLSA, has actually upgraded ITC to "Outperform" from "Buy" and had set a target price of Rs.220 for the stock.

In the last one year, the ITC stock has been one of the worst performers. After touching a high of Rs.267 in Nov-19, the stock more than halved to Rs.134, before showing some semblance of a recovery to better levels. However, taxes remain an overhang.

According to the report by CLSA, the long-term positives of the company were just about unfolding as ITC was diversifying its revenue mix out of the core cigarette and tobacco business. This big shift to FMCG business makes the valuations compelling.

ITC is betting big time on building on its brand advantage of Savlon, especially in the post-COVID situation which has seen a surge in demand for sanitation products. Savlon is expected to see a major jump in sales to Rs.1000 crore this year.