BackITC share price: Key stock levels to watch after strong Q3 earnings
ITC share price witnessed profit booking after a positive opening on Friday post strong set of Q3 results
PremiumShares of ITC erased gains after surging in Friday's opening deals on the BSE post strong Q3 results. The cigarette-to-hotel conglomerate's consolidate net profit rose 15% to ₹4,056 crore during the third quarter. The stock was trading 0.3% lower at ₹233 per share in the early deals.
“ITC's share price witnessed profit booking after a positive opening despite a very strong set of results. If we look at the earnings then there is a clear beat on most of the parameters but there is no change in the behavior of stock price because every time it comes in the range of 235-240, it witnesses selling pressure," said Santosh Meena, Head of Research, Swastika Investmart Ltd.
ITC's cigarettes segment clocked a revenue of ₹6,958 crore in Q3FY22 as compared to ₹6,091 crore in the same period last fiscal.
“Technically, 240-245 is a critical supply zone however 100-DMA of 228 is an immediate support level while 221 is the next important support level. 210 -200 is acting as a strong base for a long time and only below this, we can expect any major weakness. On the upside, if it manages to trade above 245 level decisively then we can expect a move towards 265/300 levels," Meena highlighted.
"We believe the heavy Cigarette business still haunts the share price. Cigarette constitutes 36% of revenue in Q3 and constitutes a whopping 76.5% in the overall PBIT of the company. It is a consensus that Cigarette is relentlessly discouraged in government policies. Till the management don’t demerge the company, other segments will not get fair valuation," said Anuj Jain, Co-Founder and Research Head, Green Portfolio.
The gap should bridge to some extent in times to come. However real gains, seems possible only after demerger, Jain added.
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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