Budget 2024: ITC share price soared by more than 5% on Tuesday after Finance Minister (FM) Nirmala Sitharaman announced no changes to tobacco taxation in her budget address, providing comfort to businesses like ITC, which rely heavily on cigarettes for income. The rates remained unchanged following a 16% hike in National Calamity Contingent Duty (NCCD) last year. ITC was among the top performers on the benchmarkindices, Nifty 50 and Sensex.
ITC share price today opened at ₹467.05 apiece on the BSE. The stock touched an intraday high of ₹489.80 apiece and hit an intraday low of ₹466.55. Nifty FMCG gained 2.7%, with ITC at the top of the index.
According to Ruchit Jain of 5paisa, the ITC share price has recently seen an upmove with good volumes, which is a positive sign. The immediate support for the stock is placed around 460.
Jain added that the broader trend for the FMCG index is positive, and stocks from this sector have been witnessing good price-volume action. We expect a relative outperformance from FMCG stocks in the near term.
Another advantage for ITC is the expected revival in rural demand, which would benefit the company's non-tobacco businesses, such as FMCG and Agri. The Finance Minister boosted the Union Budget's rural allocation by 12%.
Furthermore, T Manish, Research Analyst at SAMCO Securities, stated that the revisedtax rates and higher standard deduction help FMCG firms.
Manish added that FM announced higher tax rates under the New Tax Regime, in addition to the mentioned slab modifications, and increased the standard deduction from 50,000 to 75,000 for those opting for the New Tax Regime. This will result in net tax savings of roughly Rs. 17500 for individuals. This will immediately benefit corporations in the FMCG market, including HUL, ITC, Dabur, and Nestle.
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