Shares of ITC Ltd traded marginally higher on Monday, bucking the broader market trend. The stock rose 0.19% to ₹337.80 on the NSE, compared with its previous close of ₹337.15, even as the Sensex and Nifty 50 slipped into negative territory. The mild uptick indicates stock-specific buying interest and reflects investor confidence in ITC’s stable fundamentals and defensive business mix, which often provide resilience during volatile market conditions. The FMCG major has dropped over 15 per cent in just four trading sessions in 2026, thanks to the government's decision to hike excise duty on cigarettes, effective from February 1, 2026.The recent sell-off in ITC stock has erased more than Rs 82,000 crore from the company’s market capitalisation. ITC commanded a market valuation of Rs 4,29,054.23 crore at the close of markets on Tuesday.
Speaking to ET NOW Swadesh, market expert Nimesh Thakkar said that ITC has been highly sensitive to tax changes for a long time. He said that whenever there are discussions around higher sin taxes on cigarettes, ITC shares tend to show volatile moves. However, despite repeated tax hikes since 2005, ITC stock has delivered strong and stable returns for long-term investors. Besides, ITC is one such largecap company which pays consistent dividend to investors, making it an attractive play for long-term investors. “ITC is a diversified conglomerate with very strong fundamentals. Though the company generates 45-50 per cent of its revenue from the cigarette business, its long-term performance shows that it has been able to absorb such policy changes or tax hikes,” he said. This, he said, reflects ITC's stable business model.Commenting on the recent selling, Nimesh said that the correction came after the government issued a notification on excise duty on cigarettes and other tobacco products. "However, my view is that this sharp selling in ITC should be seen as a buying opportunity for long-term rather than selling or exiting the positions. ITC is currently trading near a strong long-term support zone of Rs 330-340. It has already seen a meaningful correction and I see a very limited downside in the stock from current levels," the analyst said.
He advised investors to consider buying ITC during this decline and to remain invested for a long-term view. According to him, ITC stock has the potential to gradually move towards the range of Rs 420 to 450 over the medium to long term. “My recommendation is to buy ITC around the Rs 350 from a medium to long-term investment perspective. To manage risk, investors should maintain a stop-loss at Rs 325 on a closing basis. As long as the stock holds above Rs 325, the broader trend in the counter will remains intact and the stock can crawl back towards Rs 400 and go beyond that,” Nimesh said and suggested investors to show patience for at least one year to make the most of the recent decline.ITC is widely considered as a safe bet among the investors, considering it is among the top largecap companies with high dividend yield (above 4 per cent). In FY 2025, ITC demerged its hotels business into a separate listed entity (ITC Hotels Ltd) and paid a total dividend of Rs 14.35 per share of Re 1 face value. According to BSE data, ITC has issued bonus shares on three occasions since 2005.