Why ITC Shares are on the Rise
ITC, one of India’s leading conglomerates, is making waves in the stock market as ITC shares have recently crossed an all-time high. In this article, I will attribute the company’s successful performance to several vital factors, which we will explore below. We also posted about ITC share price target upto year 2030 if you are looking for price predictions.
High growth opportunity in Millets business:
The Indian government’s recent announcement of the ‘Shree Anna Scheme’ to promote millets and ITC’s initiatives in the food processing sector has created a high growth opportunity for the company. ITC has invested ₹450 crores in a food processing plant in Hyderabad and is positioning itself as a leader in the branded agri commodity millet market.
Strong performance in the cigarette business:
Although Finance Minister Nirmala Sitharaman has increased Taxes on Cigarettes by 16% in NCCD, effectively increasing the overall cigarette taxes by only about 1-3 %, which is very minimal. We also know that the Demand for Cigarettes is inelastic (i.e., demand doesn’t change with the price increase). Cigarette smokers will smoke even if an 18 Rs cigarette costs 20. its strong performance in this sector continues to be a significant contributor to the company’s success.
Increase in Agriculture Credit Target:
The Indian government announced an 11% increase in the agriculture credit target in Union Budget 2023. This increase in credit has given a significant boost to ITC’s agri commodity and rural service business. The company has already expanded its organized agri commodity business throughout India, and this new development will further drive growth in this sector.
Increased government spending on rural development and infrastructure:
The Indian government’s allocation of Rs. 1.6 lakh crore for rural development and 10 lakh crore for infrastructure development. This increased spending from the government may give a significant boost to ITC LTDs FMCG business. ITC’s presence in rural and infrastructure sectors positions it well to take advantage of this growth opportunity.
ITC’s recent performance in the stock market is the result of a combination of strong business initiatives and favorable macroeconomic conditions. With a well-diversified portfolio, strong technicals, and a commitment to growth in key sectors, ITC is well-positioned for continued success in the years to come.
