ITC shares extend fall, cool off from 52-week high; time to book profits?

Shares of ITC Ltd on Thursday continued to fall for the second consecutive session. The stock today settled 1.24 per cent lower at Rs 439.80. ITC started falling in the previous session after hitting its one-year high of Rs 452. The stock turned ex-dividend a couple of days back. Last month, ITC declared a final dividend of Rs 6.75 for FY23. It also announced a special dividend of Rs 2.75 per for the year. If one adds the two dividends to the interim dividend of Rs 6 per share which the FMCG giant announced on February 3 this year, the total dividend for FY23 would be Rs 15.50 per share. The total dividend outflow for FY23 came at Rs 19,255.02 crore, including Rs 7,448.41 crore in interim dividend.

The cigarettes-to-hotels conglomerate's profit rose 21 per cent to Rs 5,087 crore in the quarter that ended March 2023 (Q4 FY23). The profit got boosted by solid demand for tobacco products as well as other consumer goods.

On the technical setup, support on the counter could be seen near Rs 435, followed by Rs 430, Rs 425 and Rs 420 levels. That said, analysts largely suggested that it may rise again in the near term.

Vaishali Parekh, Vice-President - Technical Research at Prabhudas Lilladher, said, "The stock has given a strong bull run recently. A further rise is anticipated with the next targets of Rs 480-490 levels. The near-term support would be near the Rs 420-425 zone.

Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers, said, "In the last 5 months, the stock has already given around 37 per cent return. One can buy in the range of Rs 445-450 for an upside target of Rs 475 with a stop-loss placed at Rs 435."

Sneha Seth, Derivatives Research Analyst at Angel One, said, "ITC has been clearly showing a spectacular run since March 2022 and the chart structure also looks good for the near term. As far as levels are concerned, Rs 430-435 levels are likely to provide an immediate cushion; whereas any closure beyond Rs 452 would bring it towards Rs 460-465."

The stock traded higher than the 20-day, 50-, 100- and 200-day moving averages but lower than the 5-day moving averages. The counter's 14-day relative strength index (RSI) came at 62.10. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-equity (P/E) ratio of 29.15. It has a price-to-book (P/B) value of 8.09.

The scrip has an average target price of Rs 464, Trendlyne data showed, suggesting a potential upside of 5 per cent. It has a one-year beta of 0.61, indicating low volatility on the counter.

Meanwhile, Indian equity benchmarks extended their fall for the second day, dragged by banks, financials and energy stocks. The 30-share BSE Sensex pack fell 194 points or 0.31 per cent to settle at 62,429, while the broader NSE Nifty moved 47 points or 0.25 per cent down to close at 18,488.

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