ITC shares hit fresh 52-week low; should investors buy the dip?

ITC share price news, ITC 52-week low price: Shares of the tobacco-to-hotels conglomerate- ITC in Thursday's session (February 20, 2025) marked their fresh 52-week low amid continued pressure in the FMCG space. The stock hit its fresh 52-week low of Rs 396.20 in intraday trade, and last at around 1 pm traded with a cut of over 1 per cent or Rs 4.25 at Rs 402.15 per share on the NSE. However, on the BSE, the stock is still trading away from its 52-week low price.

Barring intermittent gains at the close in 3 out of 13 sessions since the Budget announcement, the stock of ITC has been largely losing ground and has been trading in the range of Rs 400- Rs 450 per share.

In fact, from the budget's day close at Rs 462.55, the stock has declined as much as 14 per cent considering today's fresh 52-week low price, suggesting underperformance in comparison to the Nifty FMCG index which has shed over 11 per cent during the similar period.

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Chokkalingam G - Founder - Equinomics Research believes that the stock may be under pressure amid fears of a possible hike in taxes on cigarettes. Nonetheless, he added that it may not happen now but may be postponed to the next budget.

Echoing a similar view, Sneha Poddar, VP-Research, Wealth Management, Motilal Oswal Financial Services said, "Government is mulling raising the GST on cigarettes and tobacco products to 40 per cent plus an additional excise duty once the compensation cess ends in 2026." This is one concern likely weighing on the stock as per the expert.

Also Read: Should you buy ITC shares for short or long term now?

Should investors buy the dip in ITC stock?

Chokkalingam held that investors can buy the dip in ITC stock as the company's agri and paper business should recover in the short to medium term. Also, the FMCG sector is expected to see better demand from the current quarter.

ITC's Q3FY25 financial performance

ITC staged a mixed financial performance for the third quarter of the current financial year, with a 1.2 per cent year-on-year increase in its standalone net profit to Rs 5,638 crore, including the contribution of discontinued operations.

The company’s quarterly EBITDA—or earnings before interest, taxes, depreciation and amortisation, a key measure of operating income—grew 1.6 per cent to Rs 5,828 crore, according to a regulatory filing.

ITC’s margin—a gauge of profitability—largely met Street expectations, at 34.2 per cent.

The Kolkata-based company’s cigarette volumes grew 5.0 per cent, 100 basis points above analysts’ expectations.

ITC share price performance

The stock in the last one year has underperformed, declining 2 per cent.