Budget impact: ITC surges 8% in two days
By Abhishek Kumar |
2/2/2017 10:34 AM Thursday
One of the biggest impact of the Union Budget 2017 seems to be on the cigarette major ITC. Investors seemed to have welcomed the Budget move to hike excise duty lower than expected, which will benefit the diversified fast-moving consumer goods (FMCG) player.
Union Finance Minister Arun Jaitley, in his Budget speech, hiked excise duty by 2.5 to 6 per cent on cigarettes, which was below the market expectations of 8 to 10 per cent hike in the duty, hurting margins and volumes going forward.
In a major booster to the organised players, the government also increased additional duty on non-manufactured tobacco to 8.3 per cent from 4.2 per cent. Raising of taxes on handmade 'beedi' would be a big positive for the sector especially to the market leader ITC.
Reacting to the development, shares of ITC hit 52-week high on two consecutive days indicating positive investor and analyst sentiments. Shares of ITC were trading with gains of close to 3 per cent at Rs 278 on NSE.
Other stocks in the sector too rejoiced the move as Godfrey Phillips and VST Industries both were trading with gains of 3 and 2 per cent respectively.
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