ITC gains 1.2% after worst fall in two decades. Is the worst over?

ITC rose marginally on Wednesday morning, gaining 1.3% or Rs 3.3 to Rs 287 levels, after the stock witnessed its sharpest fall in nearly two decades – down 13% on closing basis – on Tuesday. The fall came after the Goods and Services Tax (GST) Council, on Monday, increased cess on cigarettes. The development saw brokerages revise their FY18 earnings estimates and the price target for ITC’s stock. Here is a quick compilation of what they said. Commodity Trading Tips

NOMURA

While the news is a negative for the company and will require some re-strategizing on the pricing front, we believe that the long-term story remains intact. We maintain our Buy rating and would advise investors to use the correction as an opportunity to add the stock to their portfolio. Our sum-of-the-parts-based Rs 389 target price implies around 20% potential upside. The shares currently trade at a P/E multiple of 26.7x on our FY19F EPS of Rs 12.19. Nifty Trading Tips