Stock Price Movement and Market Context
On 1 Jan 2026, ITC Ltd. traded below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling sustained downward momentum. The stock’s day change was recorded at -3.44%, reflecting pressure consistent with the sector’s performance. Despite the broader market’s positive tone, with the Sensex gaining 0.2% to 85,391.57 points and nearing its 52-week high of 86,159.02, ITC’s share price underperformed notably.
Over the past year, ITC’s stock has declined by 14.98%, contrasting with the Sensex’s 8.72% gain over the same period. The stock’s 52-week high was Rs.471.3, highlighting the extent of the recent correction.
Financial Performance and Valuation Metrics
ITC’s recent quarterly results for September 2025 were largely flat, contributing to subdued investor sentiment. The company’s dividend payout ratio (DPR) stands at a relatively low 51.68%, which may be viewed as conservative compared to peers. Additionally, the debtors turnover ratio for the half-year period was 12.97 times, indicating slower receivables collection relative to historical levels.
Despite these factors, ITC maintains a strong return on equity (ROE) of 33.4%, reflecting efficient capital utilisation. However, the stock’s price-to-book value ratio of 7.1 suggests an expensive valuation relative to book value, although it remains broadly in line with historical averages for the sector.
The company’s price-to-earnings-to-growth (PEG) ratio is 1.2, indicating that earnings growth of 18% over the past year has not fully translated into share price appreciation. This disconnect may be contributing to the current valuation pressures.
Just announced: This Small Cap from Tyres & Allied with precise target price is our pick for the week. Get the pre-market insights that informed this selection!
- - Just announced pick
- - Pre-market insights shared
- - Tyres & Allied weekly focus
Sectoral and Comparative Performance
The Cigarettes/Tobacco sector, to which ITC belongs, has experienced a decline of 3.74% on the day, reflecting broader headwinds. ITC’s performance is in line with this sectoral trend, underscoring the challenges faced by companies in this space.
Over the longer term, ITC has underperformed the BSE500 index across multiple time frames, including the last three years, one year, and three months. This underperformance highlights the stock’s relative weakness despite the company’s fundamental strengths.
Balance Sheet and Institutional Holding
ITC’s balance sheet remains robust, with an average debt-to-equity ratio of zero, indicating a debt-free status that supports financial stability. The company’s net sales have grown at an annual rate of 10.71%, demonstrating healthy long-term growth.
Institutional investors hold a significant 84.83% stake in ITC, reflecting confidence from entities with extensive analytical resources. This high level of institutional ownership suggests that the stock’s valuation and performance are closely monitored by sophisticated market participants.
ITC Ltd. or something better? Our SwitchER feature analyzes this large-cap FMCG stock and recommends superior alternatives based on fundamentals, momentum, and value!
- - SwitchER analysis complete
- - Superior alternatives found
- - Multi-parameter evaluation
Summary of Key Metrics and Market Position
ITC’s current Mojo Score stands at 46.0, with a Mojo Grade of Sell, downgraded from Hold as of 29 Dec 2025. The company’s market cap grade is 1, reflecting its large-cap status but also signalling caution in valuation terms.
While the stock’s fundamentals remain strong in terms of return on equity and sales growth, the flat recent earnings results and valuation metrics have contributed to the recent price decline. The stock’s trading below all major moving averages further emphasises the prevailing bearish sentiment.
In contrast, the Sensex is trading above its 50-day and 200-day moving averages, supported by gains in mega-cap stocks, highlighting a divergence between ITC’s share price trajectory and broader market trends.
Conclusion
ITC Ltd.’s stock reaching a 52-week low of Rs.386.5 reflects a combination of sectoral pressures, valuation considerations, and recent financial performance. Despite strong long-term fundamentals and institutional backing, the stock has experienced sustained downward momentum over the past year. The current market environment and comparative sector weakness have contributed to this development, positioning ITC as a stock under close observation within the FMCG space.
Only Rs. 9,999 - Get MojoOne + Stock of the Week for 1 Year (MRP = Rs. 34,999) Start Today
