Recent Price Movement and Market Context
On 2 Feb 2026, ITC Ltd. experienced an intraday low of Rs.303, down 2.13% from the previous close, closing the day with a decline of 1.23%. This movement aligns with the sector's overall performance, which remained largely flat. Despite the broader market's resilience—where the Sensex rebounded sharply by 445.63 points to close at 81,001.31, a 0.34% gain—the stock's performance diverged notably.
ITC's price currently trades below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling sustained downward momentum. This contrasts with the Sensex, which, although trading below its 50-day moving average, benefits from a 50-day average that remains above the 200-day average, indicating a generally positive medium-term trend for the benchmark index.
Performance Over the Past Year
Over the last twelve months, ITC Ltd. has delivered a total return of -33.87%, significantly underperforming the Sensex, which posted a 4.51% gain over the same period. The stock's 52-week high was Rs.471.3, highlighting the extent of the recent decline. This underperformance extends beyond the one-year horizon, with ITC lagging behind the BSE500 index across one-year, three-month, and three-year intervals.
Financial Metrics and Operational Indicators
ITC's recent financial results for the quarter ending December 2025 were largely flat, reflecting a period of subdued growth. The company's debtors turnover ratio for the half-year stood at 12.97 times, the lowest in recent periods, indicating a slower collection cycle compared to historical levels.
Despite these near-term headwinds, ITC maintains a strong long-term fundamental profile. The company boasts an average Return on Equity (ROE) of 27.82%, with the latest figure at 33.4%, underscoring efficient capital utilisation. Net sales have grown at an annualised rate of 10.97%, reflecting steady top-line expansion over time. Additionally, ITC's average debt-to-equity ratio remains at zero, signalling a conservative capital structure with minimal leverage.
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Valuation and Profitability Insights
ITC's valuation metrics reflect a fair pricing relative to its fundamentals. The Price to Book Value ratio stands at 5.5, which is a premium compared to its peers' historical averages. The company's Price/Earnings to Growth (PEG) ratio is 0.7, suggesting that despite the recent price decline, the stock's earnings growth of 22.5% over the past year has not been fully priced in by the market.
Institutional investors hold a significant stake in ITC Ltd., with 85.04% of shares owned by these entities. This high level of institutional ownership indicates confidence in the company's long-term fundamentals, given their capacity for detailed fundamental analysis.
Sector and Market Position
Operating within the FMCG sector, ITC Ltd. faces competitive pressures but continues to demonstrate resilience through its diversified product portfolio and steady sales growth. The sector itself has shown mixed performance, with mega-cap stocks leading the broader market gains on the day of ITC's decline.
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Summary of Key Concerns
The stock's recent decline to Rs.303, its lowest level in a year, reflects a combination of factors including flat quarterly results, a slowdown in receivables turnover, and sustained underperformance relative to benchmark indices. The downward trend is further emphasised by the stock trading below all major moving averages, signalling persistent selling pressure.
While ITC's long-term fundamentals remain robust, the current market valuation and price action indicate a cautious environment for the stock. The premium valuation metrics relative to peers and the recent price weakness suggest that the market is factoring in near-term uncertainties despite the company's steady profit growth and strong institutional backing.
Broader Market Dynamics
On the day ITC hit its 52-week low, the broader market displayed resilience with the Sensex recovering from an initial negative opening to close higher. Mega-cap stocks led the gains, contrasting with ITC's subdued performance. This divergence highlights the stock-specific pressures impacting ITC, distinct from the overall market sentiment.
Conclusion
ITC Ltd.'s fall to Rs.303 marks a significant point in its price journey, underscoring the challenges faced in recent months. The stock's underperformance relative to the Sensex and BSE500, combined with flat recent results and valuation premiums, frame the current market perspective. Nevertheless, the company's strong return on equity, consistent sales growth, and low leverage remain notable features of its financial profile.
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