ITC is one of the favorite stock for investors, still the share is not performing much these days. As the Union Budget is coming, the price of ITC is continuously showing a downward move. Union budget is always a critical event for this company, as any increase of taxes or addition of sin tax on cigarettes can weaken the most bullish fundamentals of the company.
The company has diversified presence in the FMCG, Hotels, Agri Business, Paperboards, Paper and packaging. Cigarettes are part of FMCG and is the major contributor in the business of ITC. The company earns the majority of their revenue from this segment. As the Union Budget is coming close the stock of ITC is showing weakness as this time around, the government proposed a new cigarette policy that could severely dent the prospects of the industry, which makes up for the majority of the ITC’s operating profit.
The share price of ITC had not had a good run for more than 2 years now. It has been stuck in a range. There is a lot of expectation from this stock. Let’s see what comes out in the Union Budget.
Important support levels for ITC are:
Support 1 : 198
Support 2 : 190
Important resistance levels for ITC are:
Resistance 1: 215
Resistance 2: 222
For investors, we see a long term target of 260 and 310.
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