Shares of ITC fell 1% to an intra-day low of Rs 431.10. The stock is among the major five laggards on the Nifty 50. Most analysts believe that at the current valuation, the benefits and advantages of the demerger are already known and priced in. Therefore despite, shareholders approving its plan to demerge the hotel business into a separate listed entity, there isn’t much excitement on the street.
However, Sandeep Abhange, Lead Research Analyst of Midcap at LKP Securities said that the company had already announced the demerger and the markets had already priced that in. So, the current volatility in the stock means nothing and is for a very short time.
The ITC board had proposed the demerger on August 14, 2023. From then till last evening when the shareholders approved it, the stock has fallen 3.1%. The stock of ITC has given a return of 0.6% in the last five days but wiped out nearly 5% wealth of investors in the past six months. Its scrip has fallen almost 2% in the past year and 7% from year-to-date.)
That said, the company in the January-March quarter of FY24 reported a fall of 1.06% on year in its consolidated net profit standing at Rs 5,120.55 crore against Rs 5,175.48 crore posted in the Q4 of FY23. Its consolidated revenue from operations came in at Rs 19,446.49 crore, however, saw an increase of 2.03% on year in Q4 of FY24 compared to Rs 19,058 crore in the year-ago period.