Buy ITC, proposal to ban non-tobacco products on tobacco kiosks neutral for co: Deutsche
The brokerage house has a buy rating on ITC, with a target price of Rs 350 per share. This target price is 35 percent higher than the closing price of Rs 258.60 on Wednesday.
Moneycontrol News
ITC share price gained 1.5 percent intraday Thursday, after global research firm Deutsche Bank feels the latest proposal to ban non-tobacco products on tobacco kiosks is neutral for cigarette companies.
The brokerage house has a buy rating on the stock, with a target price of Rs 350 per share. This target price is 35 percent higher than the closing price of Rs 258.60 on Wednesday.
Cigarette business contributed around 45 percent to total business of the company in the quarter ended June 2017.
However, the proposal is negative for biscuit, confectionery & snacking companies, Deutsche said.
A media report on Wednesday said the Health Ministry has ordered shops licensed to sell tobacco products to immediately stop sale of non-tobacco products such as soft drinks, and toffees, among others. The reason for this ban is to keep children from getting drawn to smoking and other tobacco products.
The Indian Parliament in 2003 had already passed The Cigarettes and Other Tobacco Products Act 2003 (COTPA) which prohibits smoking in public places, prohibits advertisement, sponsorship and promotion tobacco products, and ban the sale of tobacco products to minors and within 100 metres of educational institutions.
At 15:09 hours IST, the stock price was quoting at Rs 262.25, up Rs 3.65, or 1.41 percent on the BSE.
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