ITC shares gained 1.88 percent in morning on Friday after global brokerage house CLSA retained buy call on the stock and raised price target to Rs 400 from Rs 390 earlier due to unchanged in tobacco taxes. It implies more than 38 percent potential upside from Thursday’s closing levels.
In the last 18 months, GST Council had more than 13 meetings but has not made any change in tobacco taxes, the research house said.
With elections now around the corner, further GST tax changes seem unlikely, according to CLSA.
Hence it retained buy call and increased target price by Rs 10 apiece as the risk-reward is highly attractive & stock offers downside protection.
The stock gained more than 10 percent in last nine months. At 10:00 hours IST, it was quoting at Rs 294.15, up Rs 4.60, or 1.59 percent on the BSE.