ITC Ltd Declines 2.50% Despite Mixed Option Activity and Earnings Surge

18 May: Bullish Call Option Activity Amid Mixed Technicals

On 18 May, ITC Ltd saw significant call option trading at the ₹310 strike price, with 8,692 contracts traded and an open interest of 12,325 contracts ahead of the 26 May expiry. This surge reflected growing bullish sentiment, supported by the stock’s 0.21% gain to close at Rs.310.15, outperforming the Sensex which fell 0.35% that day. The stock traded above its 5-day, 20-day, and 50-day moving averages, signalling short- to medium-term strength, although it remained below longer-term averages, indicating a cautious outlook.

Despite the positive momentum, delivery volumes declined by 25.57% compared to the five-day average, suggesting some investor hesitation. The company’s market capitalisation stood at approximately ₹3,85,469 crore, with a Mojo Score of 57.0 and a Hold rating, upgraded from Sell in mid-April.

19 May: Surge in Put Options Reflects Bearish Hedging

The following day, ITC witnessed heavy put option activity at the ₹310 strike price, with 7,905 contracts traded and an open interest of 2,680 contracts. This indicated a more cautious or bearish stance among investors despite the stock’s modest 0.05% gain to Rs.310.30, slightly outperforming the Sensex’s 0.25% rise. The put option volumes suggested hedging against potential downside risks as expiry approached.

Delivery volumes remained subdued, down 13.37% from the five-day average, reinforcing the cautious sentiment. The stock continued to trade above its short-term moving averages but below longer-term ones, maintaining a mixed technical profile.

20 May: Price Correction Amid Low Volume

On 20 May, ITC’s share price corrected by 0.89% to Rs.307.55, underperforming the Sensex which gained 0.28%. The decline coincided with a sharp drop in volume to 478,119 shares, reflecting reduced investor participation. The stock’s technical indicators remained mixed, with short-term averages holding but longer-term trends still uncertain.

21 May: Quarterly Results Show Profit Surge Amid Revenue Challenges

ITC reported its Q4 FY26 results on 21 May, revealing a notable profit surge despite headwinds in revenue growth. The earnings performance masked underlying demand slowdowns in the FMCG segment, reflecting a complex operating environment. On the same day, the stock edged up 0.15% to Rs.308.00, marginally outperforming the Sensex’s 0.12% gain. Delivery volumes surged to 1.28 crore shares, a 78.57% increase over the five-day average, signalling renewed investor interest and possible accumulation.

Technically, the stock traded above its 50-day moving average but remained below other key averages, indicating a consolidation phase. The company’s market capitalisation was approximately ₹3,85,908 crore, with a Mojo Score steady at 54.0 and a Hold rating.

22 May: Mixed Market Signals Amid High-Value Trading and Active Options

On 22 May, ITC was among the most actively traded stocks by value, with a turnover exceeding ₹16,325 crores and a volume of 53,49,882 shares. Despite this, the stock declined 2.03% to close at Rs.301.75, underperforming the Sensex’s 0.21% gain. Institutional interest remained strong, supported by a 78.57% rise in delivery volumes from the previous day.

Options activity was robust, with call options at ₹310, ₹315, and ₹320 strikes seeing high volumes and open interest, signalling cautious bullish positioning. Simultaneously, put options at strikes near ₹300 to ₹305 also recorded heavy activity, reflecting hedging and bearish sentiment. This duality in options trading underscores the market’s uncertainty ahead of the 26 May expiry.

Daily Price Comparison: ITC Ltd vs Sensex (18-22 May 2026)

Key Takeaways

Positive Signals: ITC’s active call option market and rising delivery volumes on 21 May indicate cautious optimism and institutional accumulation. The Q4 profit surge, despite revenue challenges, highlights operational resilience. The upgrade to a Hold rating and a Mojo Score of 54.0 reflect stabilising fundamentals.

Cautionary Signals: Heavy put option activity near current prices signals hedging and bearish sentiment ahead of expiry. The stock’s underperformance relative to the Sensex and mixed technical indicators, with prices below key longer-term moving averages, suggest ongoing uncertainty. Declining volumes on some days point to investor hesitation.

Valuation Context: ITC’s valuation has shifted to attractive territory with a P/E of 16.04 and a PEG ratio of 0.72, supported by strong returns on capital. However, recent price weakness tempers immediate upside expectations.

Conclusion

ITC Ltd’s week was marked by a complex interplay of bullish and bearish forces. While option market activity and quarterly results provided reasons for cautious optimism, the stock’s 2.50% weekly decline and mixed technical signals underscore prevailing uncertainties. The elevated put option volumes and price softness suggest investors are hedging against near-term risks, even as institutional interest and delivery volumes point to selective accumulation. As expiry approaches, the ₹310 strike price remains a critical pivot level. Market participants should monitor price action closely, balancing the company’s solid fundamentals against sectoral headwinds and broader market dynamics.

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