ITC Shares Gain Over 3% in Single Session, Snaps Losing Streak After Weeks of Decline

Shares of ITC Ltd witnessed a sharp rebound in Thursday’s session, February 6, rising over 3% in intraday trade, marking their biggest single-day gain since January 1. The stock climbed more than ₹11 per share, snapping a prolonged weak trend that had seen the counter decline sharply over the past month. On the NSE, ITC shares touched ₹321.25 compared to the previous close of ₹310.25. The rally comes after the stock had corrected nearly 23% over the past six months, including a 17% slide across nine consecutive sessions between January 1 and January 13, reflecting sustained selling pressure.

Dividend Sentiment Lifts Stock

The buying interest was largely supported by positive sentiment surrounding ITC’s interim dividend announcement, even though February 4 marked the record date, meaning investors purchasing shares after this date would not be eligible for the dividend payout. Market participants, however, appear to have factored in the dividend optimism and attractive valuations after the recent correction.

Strong Quarterly Performance Despite Cost Pressures

For the quarter ended December 31, 2025, ITC reported revenue from operations of ₹21,706.64 crore, up from ₹20,349.96 crore in the corresponding quarter last year, reflecting steady year-on-year growth. Net profit stood at ₹5,018.45 crore, marginally higher than ₹5,013.18 crore in the year-ago quarter. However, profitability was impacted by rising input costs and a one-time expense linked to the implementation of India’s new labour codes.

The company incurred a one-off charge of ₹274 crore related to the labour law changes, while total expenses rose 5% year-on-year to ₹13,472 crore, driven by higher prices of key raw materials such as edible oil, wheat, and leaf tobacco. Tobacco prices have remained firm in recent quarters amid improving export demand, exerting pressure on margins. Despite these challenges, ITC’s cigarettes business posted an 8% revenue growth, while its FMCG segment — home to brands like Aashirvaad, Sunfeast, and Yippee — recorded an 11% growth, underscoring strong consumer demand. Overall revenue rose 6% to ₹19,359 crore during the quarter.

Technical View: Targets at ₹350–₹380

According to market expert Swati, ITC is currently in a favourable risk-reward zone following its sharp correction from ₹450 to ₹300 levels. “Investors can hold long positions with a medium-term target range of ₹350–₹380, while maintaining strict risk management,” she said.

Excise Duty Overhang Remains a Key Risk

Meanwhile, sentiment remains cautious due to the Indian government’s announcement of a new excise duty on cigarettes, effective February 1, 2026. The duty will be levied per 1,000 cigarette sticks, over and above the existing GST of nearly 40%, potentially impacting sector margins.