Highlights:
- Key Buyers: Major buyers of ITC shares included ICICI Prudential Mutual Fund, the Government of Singapore, and Capital Group.
- Transaction Value: The block deals amounted to nearly Rs 17,500 crore.
- Share Price Impact: ITC shares closed at Rs 422.40, a 4.49% increase after the deals.
- Analysts’ View: Positive outlook due to ITC’s strong brand and potential for FMCG volume growth.
Lowlights:
- Concentration Risk: High volume of shares being traded might indicate significant offloading by certain entities, potentially hinting at some investors reducing their exposure.
Refer to the full article - (Who are buyers of ITC shares in nearly Rs 17,500 crore block deals? - BusinessToday).
Reasons for Slow Growth and Low Volatility
- Market Saturation and Stiff Competition: ITC operates in highly competitive sectors such as FMCG and tobacco, which are mature and saturated, leading to slower growth prospects.
- Regulatory Challenges: The tobacco business faces stringent regulations, affecting its growth and contributing to overall volatility.
- Diversification Impact: While diversification into FMCG is beneficial for long-term growth, it is also a slow process with lower margins compared to the tobacco business, thus affecting overall stock performance.
- Economic Conditions: Economic slowdowns and fluctuating consumer demand have impacted revenue growth, particularly in non-core segments like agriculture and paper products.
Overall, ITC’s consistent dividend payouts and stable revenue growth in the FMCG segment are positive, but the decline in profitability and challenges in other business segments contribute to slower stock growth and low volatility.
ITC overtakes Britannia in Foods Business
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