ITC cracks 4% as Maharashtra bans sale of loose cigarettes
According to analysts, the decision is unlikely to have major impact on ITC’s stock price due to lower valuations.
By ET Online |
MUMBAI: Shares of ITC ended the day at at Rs 318.90; down 3.95%, reacting to Maharashtra government’s decision to ban sale of loose cigarettes.
The government has also banned chewing tobacco in public places, say reports.
The public notification on the same is expected to be issued in couple of days.
According to analysts, the decision is unlikely to have major impact on ITC’s stock price due to lower valuations. The stock is trading at 30 per cent discount to its peers.
Also implementation of restriction on sale of loose cigarettes will be difficult for the authorities, they say. Morgan Stanley expects the companies to introduce smaller pack sizes to cushion impact of policy change.
About 70 per cent of sales from cigarette business for ITC come from lose cigarettes.
There could be near term correction in the stock but it should be used as an opportunity to buy on dips, say dealers.
The government has also banned chewing tobacco in public places, say reports.
The public notification on the same is expected to be issued in couple of days.
According to analysts, the decision is unlikely to have major impact on ITC’s stock price due to lower valuations. The stock is trading at 30 per cent discount to its peers.
Also implementation of restriction on sale of loose cigarettes will be difficult for the authorities, they say. Morgan Stanley expects the companies to introduce smaller pack sizes to cushion impact of policy change.
About 70 per cent of sales from cigarette business for ITC come from lose cigarettes.
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There could be near term correction in the stock but it should be used as an opportunity to buy on dips, say dealers.
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