ITC Stock Performance Analyzed
ITC’s stock price has dropped significantly recently, falling another 5% to ₹346 on Friday. This follows a previous drop of nearly 10% on Thursday, triggered by the government increasing taxes on tobacco products. Investors are watching closely as the stock tests key lines on charts it hasn’t hit in years, signaling potential trouble.
Key Points
- ITC stock is down sharply, hitting a low of ₹346.
- Government tax hikes on tobacco products caused the drop.
- The stock is testing important lines on technical charts for the first time in 4 years.
- Key lines include the 50-Month Moving Average and Supertrend line.
- Brokers have downgraded ITC, fearing lower profits due to the taxes.
- Concerns exist about British American Tobacco potentially reducing its stake.
Understanding the Charts
Technical charts show ITC’s stock trading near important lines, known as the 50-Month Moving Average (50-MMA) and the Supertrend line. These lines act like guides for traders, showing where the stock has been and where it might be headed. Currently, the 50-MMA is at ₹348.50 and the Supertrend line is at ₹352.
The stock has been below another important line, the 20-MMA, for three months – the longest it’s been below this line since December 2020. This is a signal that many traders are watching.
Why the Drop?
The government raised taxes on cigarettes considerably. The changes, taking effect February 1, 2026, will increase taxes from ₹2,050 to ₹8,500 per 1,000 sticks. This means cigarettes will become more expensive for consumers.
Because of these new taxes, many financial experts, or “analysts,” have lowered their predictions for ITC’s profits. They’ve changed their recommendations to “Reduce” or “Neutral,” meaning they think the stock will likely go down in value. Some analysts predict British American Tobacco might sell more of its shares in ITC, which could make the situation worse.
Religare Broking Research also expects ITC to face lower profits and sales. They’re waiting to see what ITC plans to do about the new taxes before they revise their predictions.
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