Stock Analysis and Target for ITC

After increasing excise duty in non filter cigarette, filter cigarette business has been in demand and ITC being the leader in it can be maximum benefitted by it. Ohter business of ITC also has a better prospect now.
FUNDAMENTAL ANALYSIS:-
The company has a market cap of more than72,500 crs with a P/E of 23.48 and EPS of ITC's core cigarettes segment has shown strong resilience to the impact of VAT managing to restrict the drop in cigarette volumes to ~2% in FY08. ITC has stopped production of non-filter cigarettes post the hike in excise duties on the same.This segment was contributing only ~10% of revenues and ~8% of profits. ITC accounts for almost 3/4th of the filter cigarettes market and will be the major beneficiary of the shift in demand from non-filter to filter cigarettes. In the coming quarters, it indicates the higher cigarette prices would get successfully absorbed by the industry and ITC's cigarette volume decline would significantly reduce. Outlook for the non-cigarette businesses such as hotels and paper remains positive with continued demand buoyancy.
TECHNICAL ANALYSIS:-
Technically the stocks looks strong on the chart and in spite of panic environment the stock is trading above its 30 dma. Daily RSI and weekly MACD indicates a positive divergence and have indication for a buy.
Days BSE NSE
30 189.47 189.57
50 189.68 189.74
150 197.43 197.49
200 199.20 199.25
ADVICE TO INVESTORS:-
It is recommended for short-term investors the stock at the current levels and on declines to support of Rs 184-185 levels. Targets are as mentioned below.
TARGET:-
Based on above analysis targets estimated are
i) Short term – 205-210 Rs. for positional traders with stop loss of 183 Rs.
ii) Medium term – 250-275 Rs. for investors, Once it crosses 880 Rs.and sustain there.
iii) Long Term –280-300 Rs. for investors.
Note: - All above views are mine and before investing investors should apply their con sense and do it at their own risk.
HAPPY INVESTING