Q1FY19 Result: ITC zooms despite subdued revenues from cigarette segment

ITC, the FMCG giant, engaged majorly in cigarette making zooms more than 5 per cent in Friday’s trade after it posted robust Q1 results on Thursday post market hours. ITC which holds 5.38 per cent in Nifty50 and 41.8 per cent in Nifty FMCG index has pulled both the indices up by 0.7 and 3 per cent, respectively.

Despite being a cigarette major, increase in GST on cigarettes has weighed on the company’s performance. Cigarette segment revenue posted 3.8 per cent YoY growth, while 45.1 per cent QoQ de-growth. However, bottomline remained positive where the cigarette segment PAT grew 1.5 and 8.9 per cent YoY and QoQ, respectively. Offsetting de-growth in this segment, its second major Non-FMCG segment of agri posted 74.2 and 14.2 per cent YoY and QoQ growth, respectively.

After taking multiple support near 250 levels, the stock of ITC bounced back on a gradual basis after June 29, 2018. Considering, the weekly time frame, the stock witnessed a breakout in a range of 250 to 290. The breakout is depicted by a significant Bullish Candle, huge volumes and 14-period RSI surge from 53 to 71. Considering the daily time frame, the stock opened with a Gap up after a multiple resistance breakout at 285-290 levels and is trading volatile. We see some more upside in the stock, in case it sustains 307 and extends above 309, which is 50 per cent retracement of its downward rally from 368 to 250 levels.