No smoke rings and ITC gains 6%

Mumbai: Shares of ITC shot up 6.25 per cent to Rs 215.95 Monday as investors were relieved that the budget kept tax on cigarettes unchanged after increasing it in the past two years.

Analysts said the stock is unlikely to outperform in the short-term as the proposed Cigarettes and Other Tobacco Products Amendment Act, and slower-than-expected recovery in its hotel business could weigh on sentiment.

“Barring consumer business, ITC’s cigarettes and hotel businesses are yet to recover, and it may take two-three quarters before things gets normalised,” said Pankaj Pandey, head of research, ICICI Securities. “The stock can be a good bet for the long term.”