ITC shares in an uptrend ahead of Q2 earnings, what should investors do?

Shares of ITC Ltd have seen an uptrend in the short term ahead of the FMCG major's Q2 earnings set to be announced on October 30. The FMCG major's stock rose 5% in the last two weeks, reversing the trend impacting ITC in the medium term. The stock is down 9% in both 2025 and in a year. 

The FMCG stock was trading 0.89% lower at Rs 416.60 in the afternoon session today. Market cap of the firm stood at Rs 5.21 lakh crore. 

ITC shares hit a 52 week-low of Rs 391.50 on March 3, 2025. However, it clocked 165% returns in the last five years. 

ITC shares are neither oversold nor overbought on charts, with their RSI standing at 67. The FMCG stock trades higher than all its long-term and short-term moving averages.

Analysts look bullish on the outlook of the FMCG stock. Here's what they said. 

Amruta Shinde, Research Analyst, Choice Broking said, "ITC is currently trading at Rs 420.65, having recently rebounded from a key support zone. The stock is on the verge of breaking out of a falling trendline on the weekly timeframe, signaling an early indication of a potential trend reversal. This setup is supported by rising volumes, highlighting renewed buying interest and improving market sentiment. 

Technically, the stock is trading comfortably above its 20-, 50-, and 200-day EMAs, underscoring robust short- and medium-term momentum. The RSI at 67.97 is trending upward on the daily timeframe, indicating strengthening bullish momentum. In the near term, the stock appears poised to move toward Rs 455, with immediate resistance at Rs 430 and support at Rs 411. Traders may consider initiating long positions near Rs 420.65 with a target of Rs 455 and a stop-loss at Rs 404, while maintaining disciplined risk management amid short-term volatility."

Kunal Kamble, Sr. Technical Research Analyst at Bonanza said, "ITC is currently exhibiting a weak technical structure as the primary trend continues to form a series of Lower Lows and Lower Highs, indicating a prevailing downtrend. The secondary trend remains flat to negative, reflecting weak sentiment in the stock. However, the minor trend has shown some temporary buying interest from a rising support trendline, suggesting a short-term pullback rather than a reversal. On the volume front, declines are accompanied by higher volumes compared to the upmoves, highlighting limited buyer participation and a fragile uptrend. A decisive close above Rs 431.10 with a surge in volume would be required to confirm a shift in sentiment and attract fresh buying interest. Until then, the stock is best avoided at current levels, as the broader trend remains negative with only minor signs of recovery."

Brokerage Emkay Global has a price target of Rs 475 on the ITC stock. 

Emkay Global has an ADD rating on ITC with a target price of Rs 475, suggesting a 14% potential upside from the current level of Rs 415. The positive outlook is backed by factors such as improved management execution, a strong position in its core cigarette business, and growth in the FMCG sector, despite recent performance fluctuations and industry challenges. 

In the first quarter of this fiscal, ITC reported a 5% rise in consolidated net profit. Net profit stood at Rs 5,343 crore in the June quarter against Rs 5092 in the corresponding period a year earlier. Revenue climbed 20 per cent to Rs 23,007 crore in Q1 from Rs 19,239 crore in the June 2024 quarter.

EBITDA rose 4.2% to Rs 6816 crore in Q1 against Rs 6545 crore on a YOY basis. Q1 EBITDA margin came at 29.30% against 34.55% a year ago.