ITC gains on heavy volumes

Shares in ITC, the country's largest cigarette manufacturer, is trading higher by 1.3% at Rs 324 on BSE on back of heavy volumes.

At 1045 hours, a combined 4.16 million shares have already changed hands on the counter against an average around 9 million shares that were traded daily in past two weeks on BSE and NSE.

On BSE, about 0.50 million shares have changed hands at Rs 322.70 and another 0.50 million shares at Rs 322.90, data shows.

On Monday, June 23, 2014 the stock has tanked nearly 7% on concerns over a higher tax burden on cigarette prices.

Despite recent news reports, most brokerages remain bullish on ITC, given the reasonably strong demand inelasticity in the cigarettes segment and the attractive risk-reward equation, the Business Standard report suggests.

Morgan Stanley upgraded the stock from equal-weight to overweight and raised the target price from Rs 360 to Rs 400, added report.

ITC Limited