ITC Ltd. Stock Falls to 52-Week Low of Rs.345.35 Amid Sector Pressure

Recent Price Movement and Market Context

On 2 Jan 2026, ITC Ltd. touched an intraday low of Rs.345.35, representing a 5.11% drop on the day and a 4.49% decline in the latest session. The stock has been on a downward trajectory for the past two days, cumulatively losing 13.04% in returns during this period. This movement contrasts with the broader Sensex, which opened flat but gained 0.25% to trade at 85,403.34 points, just 0.88% shy of its 52-week high of 86,159.02. The Sensex continues to trade above its 50-day moving average, signalling a generally bullish market environment.

Within the FMCG sector, the Cigarettes/Tobacco segment, where ITC operates, has also experienced pressure, declining by 3.44%. 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, indicating sustained downward momentum.

Performance Over the Past Year

ITC Ltd. has underperformed significantly over the last twelve months, delivering a negative return of 24.89%, while the Sensex has appreciated by 6.82% over the same period. The stock’s 52-week high was Rs.471.30, highlighting the extent of the recent decline. This underperformance extends beyond the last year, with ITC lagging behind the BSE500 index over the past three years, one year, and three months.

Financial Metrics and Valuation Insights

ITC’s recent flat financial results for the quarter ended September 2025 have contributed to the subdued market sentiment. The company’s Dividend Payout Ratio (DPR) stands at a relatively low 51.68%, which may be a factor in investor caution. 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 compared to historical levels.

Despite these near-term concerns, ITC maintains strong long-term fundamentals. The company boasts an average Return on Equity (ROE) of 27.82%, with the latest ROE reported at 33.4%. Net sales have grown at an annual rate of 10.71%, reflecting steady revenue expansion. The company’s average Debt to Equity ratio remains at zero, underscoring a conservative capital structure with minimal leverage.

Valuation metrics suggest ITC is trading at a fair value relative to its peers. The Price to Book Value ratio is 6.4, consistent with the company’s quality and growth profile. The Price/Earnings to Growth (PEG) ratio stands at 1.1, indicating that the stock’s price is aligned with its earnings growth rate. Over the past year, while the stock price has declined by nearly 25%, the company’s profits have increased by 18%, highlighting a divergence between market valuation and earnings performance.

Institutional Holding and Market Perception

Institutional investors hold a significant stake in ITC Ltd., with 84.83% of shares owned by these entities. This high level of institutional ownership reflects confidence in the company’s long-term fundamentals and governance. Institutional investors typically have greater resources and analytical capabilities to assess company performance, which may provide some stability amid price fluctuations.

Sector and Market Dynamics

The FMCG sector, particularly the Cigarettes/Tobacco segment, has faced headwinds recently, with sectoral declines impacting ITC’s share price. While the broader market indices, including the Sensex, have shown resilience and are trading near their 52-week highs, ITC’s stock has not mirrored this strength. The divergence between ITC’s performance and the overall market highlights sector-specific pressures and company-specific valuation adjustments.

ITC’s market capitalisation grade is rated at 1, reflecting its status as a large-cap stock with significant market presence. However, its Mojo Score of 46.0 and a recent downgrade from a Hold to a Sell rating on 29 Dec 2025 indicate a cautious stance based on current performance metrics and valuation considerations.

Summary of Key Price and Performance Indicators

To summarise, ITC Ltd. has reached a 52-week low of Rs.345.35, with the stock price declining over 13% in the last two trading sessions. The stock trades below all major moving averages, signalling continued downward momentum. Over the past year, the stock has underperformed the Sensex by more than 30 percentage points. Despite this, the company’s long-term fundamentals remain robust, with strong ROE, steady sales growth, and a conservative debt profile. Institutional ownership remains high, suggesting confidence in the company’s underlying business model.

While the stock’s recent price action reflects market and sector pressures, ITC Ltd.’s financial metrics and valuation indicate a complex picture of near-term softness against a backdrop of enduring fundamental strength.

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