ITC shareholders take a Rs 98,000-crore hit in January; more downside likely?

Shareholders of ITC took a Rs 98,000-crore hit in January after the FMCG stock tanked nearly 11% following fresh excise duty hikes on cigarettes announced by the government in the beginning of this month. ITC stock, which stood at Rs 402.70 on December 31 last year closed at Rs 324.90 in the current session. Market cap of the firm stood at Rs 4.07 lakh crore. 

The stock is strongly oversold on charts as RSI of the ITC stock stands at 16. A RSI reading below 30 indicates that there are more sellers than buyers for the stock. 

The stock fell to a 52-week low for the second straight session today. It hit a low of Rs 321.20 in the current session.  

The stock is down 21.30% in three months and fallen 27% in two years. 

Jigar S Patel from Anand Rathi said,"Support will be at Rs 320 and resistance at Rs 340. A decisive move above the Rs 340 level may trigger a further upside to Rs 350. The expected trading range will be between Rs 320 and Rs 350 for the short-term."

Drumil Vithlani, Technical Research Analyst at Bonanza Portfolio said, "ITC has witnessed a decisive bearish breakdown from its long-term descending triangle on the daily chart, indicating a shift in trend. The stock has slipped below key EMAs, confirming sustained selling pressure. On the downside, Rs 324 is an immediate support; a breakdown below this level may drag the stock towards Rs 310–300 in the coming weeks. On the upside, Rs 350–370 will act as a strong resistance zone. Overall, the outlook remains bearish until ITC reclaims Rs 370 with strong volumes."

Brokerage Nuvama has downgraded the ITC stock from 'buy' to 'hold', expecting negative impact of excise duty hikes on sales and operational income. It has assigned a price target of Rs 415 against the earlier Rs 534 on the ITC stock.

Japanese Brokerage Nomura has double-downgraded ITC to "reduce" from its earlier rating of "buy" and pared its price target by Rs to Rs 340 from Rs 540 earlier.

Axis Securities has a hold rating on the stock with a price target of Rs 380.

"Considering the recent tax hikes in cigarette business and near-term headwind in the industry, we cut the margin estimates for FY26/FY27 but remain positive on medium to long-term growth," the brokerage said.