ITC hits a new high on GST joy

ITC is amongst the top gainers on the BSE today morning. The stock hit a new 52-week high today at Rs.353.20.

The stock is reacting positively to the new GST regime as it attracts lower taxes on cigarettes now. Brokerage houses have given a positive call as post GST, it will boost earnings.

Starting from 1st July, the overall tax per cigarette is to drop on an average of 7-9% if the company decides to keep the prices steady.

Deutsche Bank has put out a report stating that ITC would be increasing trade spends on cigarettes, increase incubation expenses in other products like dairy, chocolates, or launch a low-priced cigarette, at lower profits or a marginal loss in the interim to drive volumes, to comply with the anti-profiteering law.