ITC Share Price Surges Over 5% on No Tax Announcement for Tobacco
The ITC share price soared by more than 5% on Tuesday following Finance Minister Nirmala Sitharaman's announcement of no changes to tobacco taxation in the Union Budget 2024. This decision provided significant relief to businesses like ITC, which heavily rely on cigarette sales for their income. The rates remained unchanged after a 16% hike in the National Calamity Contingent Duty (NCCD) last year. As a result, ITC emerged as one of the top performers on the Nifty 50 and Sensex indices.
Also Read:- Union Budget 2024: New Tax Regime Slabs Changed, Standard Deduction Up From ₹ 50,000 To 75,000
ITC Share Price Performance
On the BSE, ITC share price opened at ₹467.05 apiece, reaching an intraday high of ₹489.80 and an intraday low of ₹466.55. The Nifty FMCG index also gained 2.7%, with ITC leading the charge.
Ruchit Jain of 5paisa noted that the recent upmove in ITC's share price, accompanied by good volumes, is a positive sign. He identified immediate support for the stock around ₹460. Jain further highlighted the positive broader trend for the FMCG index, expecting relative outperformance from FMCG stocks in the near term.
Rural Demand and FMCG Sector Outlook
An expected revival in rural demand is another advantage for ITC, which would benefit its non-tobacco businesses, including FMCG and Agri. The Finance Minister increased the Union Budget's rural allocation by 12%, potentially boosting rural demand.
T Manish, Research Analyst at SAMCO Securities, emphasized that the revised tax rates and higher standard deduction will aid FMCG firms. The Finance Minister announced higher tax rates under the new tax regime, along with an increased standard deduction from ₹50,000 to ₹75,000 for those opting for the new tax regime. This change will result in net tax savings of roughly ₹17,500 for individuals, benefiting corporations in the FMCG market, such as HUL, ITC, Dabur, and Nestle.
News Source:- livemint.com
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