Recent Price Movement and Market Context
The stock’s new low of Rs.337.45 contrasts sharply with its 52-week high of Rs.471.30, underscoring a notable depreciation of nearly 28.4% from its peak. ITC’s share price currently trades below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling a bearish momentum in the short to long term.
On the broader market front, the Sensex experienced a negative session, closing down 247.18 points at 83,774.91, a decline of 0.48%. Despite this, the Sensex remains relatively resilient, trading just 2.85% below its 52-week high of 86,159.02. The index is positioned below its 50-day moving average, though the 50DMA remains above the 200DMA, indicating mixed signals for the overall market trend.
Performance Metrics and Comparative Analysis
Over the past year, ITC Ltd. has delivered a total return of -24.95%, significantly underperforming the Sensex, which posted a positive return of 7.93% during the same period. This underperformance extends beyond the last year, with ITC lagging behind the BSE500 index across one-year, three-year, and three-month timeframes.
The stock’s market capitalisation grade stands at 1, reflecting its current valuation challenges. The company’s Mojo Score has deteriorated to 48.0, resulting in a downgrade from a Hold to a Sell rating as of 29 December 2025. This shift highlights growing concerns regarding the stock’s near-term prospects relative to its peers.
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Financial Performance and Dividend Trends
ITC’s recent quarterly results for September 2025 were largely flat, contributing to the subdued investor sentiment. The company’s Dividend Payout Ratio (DPR) for the year stands at a relatively low 51.68%, which may be viewed as conservative compared to sector norms.
Additionally, the Debtors Turnover Ratio for the half-year period is at 12.97 times, the lowest in recent assessments, indicating a slower collection cycle that could impact working capital efficiency.
Long-Term Fundamentals and Valuation Metrics
Despite the recent price weakness, ITC maintains strong fundamental credentials. The company boasts an average Return on Equity (ROE) of 27.82%, reflecting robust profitability over the long term. Net sales have grown at a compound annual growth rate of 10.71%, signalling steady top-line expansion.
ITC’s average Debt to Equity ratio remains at zero, underscoring a conservative capital structure with minimal leverage. The current ROE of 33.4% supports a fair valuation, with the stock trading at a Price to Book Value ratio of 6, which aligns with historical averages for its peer group.
Profitability has improved over the past year, with net profits rising by 18%, even as the stock price declined. The company’s Price/Earnings to Growth (PEG) ratio stands at 1, indicating valuation in line with earnings growth expectations.
Institutional Holding and Market Position
Institutional investors hold a significant 84.83% stake in ITC Ltd., reflecting confidence from entities with extensive analytical resources. This high level of institutional ownership often provides a stabilising influence on the stock, even during periods of price volatility.
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Summary of Key Concerns
The stock’s recent decline to a 52-week low is attributable to a combination of factors including flat recent earnings, a conservative dividend payout, and a slowdown in receivables turnover. These elements have contributed to a downgrade in the company’s Mojo Grade from Hold to Sell, reflecting a cautious stance on its near-term price momentum.
ITC’s underperformance relative to the Sensex and BSE500 indices over multiple time horizons further highlights the challenges faced by the stock in maintaining investor confidence amid broader market fluctuations.
Broader Market and Sector Context
While ITC’s stock price has weakened, the FMCG sector as a whole has shown mixed performance, with the stock’s day change of -0.89% being broadly in line with sector movements. The Sensex’s modest decline today contrasts with ITC’s sharper losses over the past week, indicating company-specific pressures rather than purely market-driven factors.
ITC’s valuation metrics remain within reasonable bounds relative to its peers, supported by strong long-term fundamentals and a conservative balance sheet. However, the current market sentiment and recent financial indicators have weighed on the stock’s price trajectory.
Conclusion
ITC Ltd.’s fall to Rs.337.45 marks a significant milestone in its recent price journey, reflecting a period of sustained weakness and underperformance relative to broader market indices. The stock’s downgrade to a Sell rating and its position below all major moving averages underscore the challenges it currently faces. Nonetheless, the company’s solid long-term fundamentals and institutional backing remain notable features amid the prevailing market conditions.
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