ITC Shares Top ₹500 As Budget 2024 Keeps Tobacco Taxes Steady; Jefferies Upgrades To Buy

ITC shares surged by nearly 4% on July 24, surpassing the ₹500 mark for the first time. This rise continues the momentum from the previous day’s 5.5% rally, fueled by favorable developments in the Indian Budget 2024. Finance Minister Nirmala Sitharaman’s decision to leave tobacco taxes unchanged has been a key driver of this boost. Bro ITC shares surged by nearly 4% on July 24, surpassing the ₹500 mark for the first time. This rise continues the momentum from the previous day’s 5.5% rally kerage firm Jefferies responded by upgrading ITC’s stock rating to a “buy,” setting a target price of ₹585, which implies a potential upside of 15.5%. The stock hit a new intra-day high of ₹510.60.

Over the past year, ITC’s stock has increased by 10.5%, including a 4.4% gain in the last month alone. Notably, the stock has climbed over 19% in July and nearly 28% from its 52-week low of ₹399.30 recorded on March 12, 2024. The unchanged tobacco taxation, following last year’s 16% hike in the National Calamity Contingent Duty (NCCD), has been a relief for ITC, helping it to become one of the top performers on the Nifty 50 and Sensex indices.

Jefferies remarked that “no news is great news” for ITC, emphasizing that the stability in tobacco taxes and likely unchanged GST rates until March 2026 are significant positives for the company. Additionally, the demand outlook for the staple sector, including ITC’s non-tobacco segments like FMCG and agriculture, is improving. The Finance Minister’s announcement of a 12% increase in the rural budget allocation is expected to bolster rural demand, benefiting ITC’s diverse business portfolio.

Furthermore, the Budget’s introduction of higher tax rates under the New Tax Regime, alongside an increase in standard deductions from ₹50,000 to ₹75,000, is anticipated to result in net tax savings of around ₹17,500 for individuals. This is expected to boost spending in the FMCG sector, benefiting companies like HUL, Dabur, Nestle, and, of course, ITC.

Overall, the Budget 2024 announcements have positioned ITC shares for potential growth, as investors respond positively to the stability in taxation and favorable market conditions.