Shares of ITC Limited declined on Thursday as investors booked profits, even as the broader Indian equity markets rebounded and snapped their recent losing streak amid ongoing tensions linked to the USA–Israel–Iran conflict. At 9:55 am IST, the BSE Sensex was up 472.30 points, or 0.60%, at 79,588.49, while the Nifty 50 rose 165.30 points, or 0.68%, to 24,645.80, ending a three-day losing streak. All 16 major sectoral indices opened in positive territory, signalling a broad-based recovery in equities, while broader markets outperformed with mid-cap and small-cap indices gaining around 1% each.
Despite the positive sentiment across the market, ITC shares witnessed mild selling pressure as traders locked in gains and remained cautious amid global geopolitical uncertainties. The stock was trading at ₹309.75 against its previous close of ₹311.95. The stock had touched a 52-week low of ₹302 on February 2 but has since seen mild buying interest, partly supported by recent cigarette price hikes. Analysts continue to maintain a broadly positive long-term outlook on the company, although near-term caution persists due to uncertainty around how higher cigarette prices could affect volumes.
Nandish Shah, AVP – PCG Research and Advisory (Fundamental) Wealth Management at Motilal Oswal Financial Services, has maintained a “neutral” rating on the stock with a target price of ₹365. According to Shah, ITC’s core cigarette business delivered a steady performance in the third quarter, while the FMCG segment recorded healthy growth in operating profit. However, changes in GST and excise duty effective February 1, 2026, have resulted in a sharp increase in cigarette taxation. While ITC’s diversified product portfolio across price segments offers some resilience, analysts warn that increased competition from illicit cigarette trade could weigh on growth in the organised industry.
From a technical standpoint, Jigar S. Patel, Senior Manager – Equity Technical Research at Anand Rathi Share and Stock Brokers, noted that the stock is currently trading within the 50%–61.8% Fibonacci retracement zone of its major rally from the COVID-era lows to the September 2024 peak. This zone is typically considered a strong support area and may signal a phase of consolidation before the next directional move.
Patel expects the stock to trade in a range of ₹335 to ₹300 in the near term. Momentum indicators such as the Relative Strength Index (RSI) are hovering in oversold territory, suggesting that selling pressure may be nearing exhaustion and that a gradual pullback could occur.
He recommends accumulating the stock in the ₹335–₹305 band, with an upside target of ₹385 and a strict stop loss below ₹285 on a closing basis. The suggested investment horizon for this strategy is three to four months.
Despite short-term headwinds, experts remain optimistic about ITC’s structural growth drivers. The company has demonstrated strong pricing power, successfully implementing price increases of 20%–40% across key brands to protect margins. Long-term growth is expected to be supported by a recovery in urban consumption, improving hotel occupancy levels, and expansion of the non-cigarette FMCG business, which has set a revenue target of ₹1 lakh crore by 2030.
Analysts, however, highlight three key risks: regulatory uncertainties related to tobacco taxation, competition from illicit cigarette trade, and commodity price inflation. Even so, with a dividend yield of around 4.4% and relatively attractive valuations, the stock continues to appeal to value-focused investors looking to accumulate within the ₹335–₹305 range, with potential upside towards ₹385.