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ITC is no longer a part of the top 10 companies
February 03, 2020
After the government proposed a hike in the tax of tobacco & cigarettes ITC lost its place in the list of top 10 companies in terms of market capitalization. There is a 10% increase in the excise duty on cigarettes.
It has seen the biggest two-day fall of 9.4% in 18 months in which investors have lost over Rs. 33,000 crores.
Valuations have corrected but the earnings visibility remains weak given the further increase in cigarette taxes. ITC now ranks eleventh and has been replaced by Bharti Airtel Ltd and State Bank of India.
An increase in tax comes as a negative surprise and is likely to affect growth in the near term. The increase in cigarette duties is likely to result in a hike in cigarette prices for consumers.
According to the sources, ITC has 29 buy ratings, eight hold ratings, and one sell rating.
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