Asia’s largest cigarette maker ITC on Monday narrowly regained its position as India’s most valuable fast-moving consumer goods stock after ousting Hindustan Unilever (HUL).
The Kolkata-based company, which makes money primarily from cigarette sales and also has interests in the hotel, paper and consumer staples industries, was valued above 6.1 trillion rupees ($74 billion) for the first time in Monday’s session.
The cigarette maker has rallied more than 60 percent in the past 12 months, outperforming all other Nifty 50 stocks.
ITC’s stock closed 3.9% lower, paring gains of up to 1.9% on the day after the company announced plans to spin off its hotel business and retain a 40% shareholding in the new entity.
Investors prefer ITC over Hindustan Unilever from an earnings perspective. As HUL continued its anemic post-pandemic recovery in rural Indian sales, ITC’s diversified business interests helped boost earnings per share nearly 30% in the year ended March.
Before the demerger announcement, Sachin Bobade, vice-president of consumer affairs at Duluth Capital Markets, said ITC will definitely overtake HUL in the near term. “ITC still has juice left because its cigarette business doesn’t have much upside.”
ITC’s market capitalization overtook that of HUL four years ago.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
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