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ITC surpasses BAT to become third-largest tobacco company

EditorJake Owen
Published 2023-12-10, 05:00 a/m
© Reuters.

MUMBAI - Indian conglomerate ITC Ltd has overtaken British American Tobacco (NYSE:BTI) (BAT (LON:BATS)) to become the world's third-largest tobacco company by market capitalization, reaching a value of $67 billion. This shift in ranking follows a significant decline in BAT's share price after the company reported a substantial write-down on its U.S. assets.

ITC's ascent in the tobacco industry is attributed to a strong performance in its cigarette business, which reported a 10% year-on-year increase in revenue, amounting to Rs 7,658 crore. This surge has contributed notably to the company's overall revenue and profit growth.

The rise of ITC's stock by 35% stands out against the backdrop of the broader Nifty index's performance, showcasing the company's resilience and strategic market positioning. Analysts attribute this success to ITC's recovery of volume from illegal trade and effective market interventions. These have been bolstered by enforcement agencies' crackdown on illicit trading activities and a stable tax environment.

Looking ahead, market experts see potential for ITC to expand its portfolio beyond fast-moving consumer goods (FMCG) while also reinforcing its core tobacco business. Religare Broking maintains a positive outlook on ITC, recommending a "Buy" rating and setting a target price of Rs 535 for the company's shares. This endorsement reflects confidence in ITC's ability to navigate market challenges with agility and capitalize on growth opportunities within its diversified business model.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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