ITC shares at 52-week low post 15% YTD correction; what's next?

ITC shares, which are down 15% this year on fresh excise duty hikes on cigarettes announced by the government, slipped to a fresh 52 week low in the previous session. ITC  stock ended 3.91% lower at Rs 309.60 on February 1, the day when excise duty hike came into effect. The duty hike was announced in beginning of this year.

The stock fell to a low of Rs 306.35 during the session. Market cap of the FMCG firm slipped to Rs 3.87 lakh crore.

The FMCG stock is heavily oversold on charts, with a RSI of 18.4.

According to brokerage Systematix, ITC would need to take product price hikes of at least 25-35% (lower on small/ regular filters, higher on premium filters) to try and maintain revenues.

It believes pricing is still likely to lag the higher tax burden by a material margin – implying pressure on realisations. This quantum of pricing could also be a negative for volume growth

Systematix has a hold call on the FMCG stock with a price target of Rs 355.

Taking into account the excise duty hike, the brokerage has lowered its FY26/ FY27E/ FY28E revenue estimates by 3%/ 7%/ 7% and EPS estimates by 4%/ 10%/ 10%, respectively to account for the impact of tax changes on realisations and margins.