ITC shares in recovery mode in February; can they extend gains?

Shares of FMCG major ITC are in a recovery mode, rising 8% from their 52-week low in February. ITC stock rally was supported by strategic price hikes in its core cigarette business to offset new tax burdens and strong Q3 performance in its FMCG-others segment.

Japanese brokerage Nomura believes that given the significantly high quantum of the tax hike, “ITC might be taking price increases in stages to cushion the likely sharp volume decline.” 

ITC’s cigarette business accounts for more than 40 per cent of the company’s total revenue alone.

As per B&K Securities, with the recent price hike in the cigarette business, overall profitability fall may be mitigated. As per the brokerage’s channel checks, ITC has effected steep price hikes across some categories. This negates excise hike impact and adds to EBIT per stick.

Brokerage Systematix has a hold call on the ITC stock with a target price of Rs 355. The conglomerate saw its cigarette volumes grow by 6.5 per cent YoY, while its FMCG segment grew 11 per cent in Q3, led by staples such as atta and biscuits. 

In the current session, ITC shares were trading 2.50% higher at Rs 327.80. With today’s rally, ITC stock has recovered 8% from its 52-week low of Rs 302 hit on February 2, 2026. However, ITC shares are still down 27% from their 52-week high of Rs 444.15 reached on May 27 last year. 

The FMCG stock could not deliver any returns for shareholders for period up to three years. ITC shares fell 20.24% in a year and 11% in 2026. In three years, the stock has lost 11% and is down 15% in two years. On the other hand, the vcompany is almost debt free. It has a healthy net profit CAGR of 32.7 in three years

Axis Securities has a hold rating on the stock with a price target of Rs 380.

“Considering the recent tax hikes in cigarette business and near-term headwind in the industry, we cut the margin estimates for FY26/FY27 but remain positive on medium to long-term growth,” the brokerage said.

Mirae Asset Sharekhan has a buy call on the ITC stock with a price target of Rs 400. 

According to the brokerage, ITC has undertaken relevant strategic actions to revive growth in the non-cigarette FMCG business. Long-term growth trajectory remains intact, with most business segments maintaining steady progress. 

In the third quarter of this fiscal,  the firm said its consolidated gross revenue rose 7.1% year-on-year to Rs 21,578 crore. Profit after tax before exceptional items rose 9.9% to Rs 5,284 crore, led by continued momentum in FMCG, cigarettes, and agri-business segments. 

The FMCG-others segment recorded double-digit growth with revenue up 12.6% and segment PBIT surging 42% year-on-year. Staples, dairy, noodles, biscuits, personal care, and homecare categories led the charge. ITC also clcoked a 60% rise in revenue from its digital-first and organic brands including Yogabar, Prasuma, and 24 Mantra, alongside strong growth in e-commerce and modern trade channels.

In the cigarettes segment, net revenue rose 7.9%, aided by volume-led growth and performance of differentiated and premium offerings.