Mumbai: Shares of ITC Ltd on Monday rose after some brokerages upgraded the stock with a “buy" rating and increased its target price on better-than-expected earnings. The bonus issue announcement has also boosted sentiment.

The stock was among the top performers on the S&P BSE Sensex and closed up 5.29% at 347.40, a level last seen on 2 December 2015. As a result, the company’s market capitalisation increased by 14,042 crore to 2,79,559.97 crore.

Intraday, the stock rose as much as 7.5% to hit a seven-month high of 354.75.

The stock has gained in seven out of the past eight trading sessions. Since 11 May, it has risen over 9.43% and so far this year, it has advanced 6.23%.

Brokerages including Motilal Oswal, PhillipCapital, Antique Stock Broking, SBICap Securities, IDFC Securities, Sharekhan and KR Choksey, have increased ITC’s stock price estimate.

The company on Friday reported an increase of 5.67% in stand-alone net profit at 2,495.20 crore, while net sales rose 9.5% to 10,062.38 crore. Earnings before interest tax and depreciation (Ebit) was at 36.3% as against 35.6% estimated by analysts. Cigarette sales grew by 10.2%, the highest in six quarters. The company offered shareholders one bonus share for every two held and a dividend of 8.5 per share.

“The volume growth outlook for the crucial cigarette segment (86% of FY16 Ebit) appears to be improving over the past two quarters, and we believe that the worst is now behind for the segment. Most of the negatives (including the onset of 85% pictorial warnings) are now factored into the stock price," Motilal Oswal said in a note to its investors.

PhillipCapital said, “We believe that ITC cigarettes business is past the period of peak pressure on volumes and is set for revival. A strong growth in cigarettes business (cash cow) will also help grow thin other businesses like FMCG."

Motilal Oswal has maintained the “buy" rating on the stock with a revised target price of 400 a share from 370 earlier. Antique stock broking kept the stock with a buy rating and increased its target price by 12% to 370 per share, SBICap Securities maintained a buy rating and increased its target price to 380 a share from 353 a share, IDFC Securities upgraded the stock to outperform with a target price of 390 a share, Sharekhan maintained buy rating and increased its target to 375, while KR Choksey recommended a buy rating and increased the target price by 30.3% to 430 per share.

Of the analysts covering the stock, 33 have a “buy" rating, five have a “hold" rating, while four have a “sell" rating, according to Bloomberg data.