Hard times with Bearish trend for ITC Ltd

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The Indian Multinational Conglomerate which has a history of over 100 years in the market has seen the evolution of business and also has been successfully evolving through changes in the market by expanding its business operations in various sectors making its business well diversified and established. The company’s major revenue is being generated through its dominant cigarette sales has been declining throughout the years as the tax being imposed on the sales of tobacco products has been increasing with the release of every year’s budget.
The following graph shows the effect of budget on the share price of the company as it opened the market with the price of Rs.215 which is way below the previous day’s closing price and closed at the price of Rs.207.60. This shows the bearish trend of the stock in the market as the major revenue generating segment was highly affected by the tax rates announced in the budget. The chart also shows the bearish trend which has been continuing from 8th November 2019, the price movements were not fluctuating much during these periods but got affected during the release of the Union Budget 2020.



The hike in tax rates forced the company to hike their prices on various cigarette brands from 14%-18% which has been the stock price of the company. As the revenue generated through the tobacco products segment of the company is declining, the company should also focus and widen its business operation in other segments which will diversify the losses and also add up to the revenue of the company. Also, focusing on launching innovative products by the company would boost their performance while there are talks about the company entering the frozen food segments which can be utilized for reviving the business.
The following chart shows that the candlestick of the company’s stock has reached its lower band and also with a bullish candlestick. This indicates that there might be a change in the trend of price movements for the upcoming trading sessions as the market sentiments would also change for the stock.



The company’s stock has also reached its all-time low price of Rs.197.55, but closed the price movements with a bullish trend. Also a bulge in the Bollinger bands depicts that there are room for change in the trend in the next trading sessions which have to dealt with support and resistance level.

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