NoTradeZone-Journal Entry – ITC – 07-05-2026
| Date: 07-05-2026 | Stock ITC | Entry price₹ 307 | Position Lot 1 |
Why Now
ITC hit a 52 week high of ₹444 and has since fallen to ₹307 — roughly 30% off the high. Dividend yield at current price sits at 4.5%. Nothing fundamental has changed in the business.
The market appears to be reacting aggressively to the cigarette tax hike. Historically ITC has managed to pass on a significant portion of tax increases to consumers, though long-term volume pressure remains a risk.
That gap between market reaction and business reality is the entry point.
The Range
52 week high: ₹444 52 week low: ₹287 Entry: ₹307.55 Down from high: ~30% Average if drops to: ₹287-290 A 20% move from current levels would likely trigger partial profit booking depending on market conditions and thesis.
The Business
ITC often trades like a mature dividend-oriented business — range-bound, cash generating and sentiment driven. Revenue is dominated by cigarettes. FMCG, hotels and agri are good businesses but tobacco is the engine.
The range since August 2024 has been ₹240 to ₹444 — multiple cycles. This setup has appeared 2-3 times a year consistently. That’s exactly what this system targets.
The Risk
Cigarette tax policy is the primary risk — but it cuts both ways. Negative policy creates opportunity to enter. Positive policy creates opportunity to exit. Monitor closely.
Structural risk — any significant regulatory move against tobacco beyond annual tax hikes. This would require thesis reassessment.
This thesis breaks if cigarette volume growth turns negative for two consecutive quarters or if structural tax increases permanently compress margins and growth.
What I’m Watching
Cigarette tax policy announcements. ITC quarterly revenue — specifically cigarette volume trends. Any FMCG segment acceleration that changes the revenue mix.
Current Status Both lots active. Lot 1 at ₹307.55, Lot 2 at ₹290.60.
Q4 FY26 results confirmed the business was intact — cigarette revenue +29.5% YoY, pricing power demonstrated post the earlier hike. That was February.
Since then, GST 2.0 has changed the picture materially. Cigarette taxes up 60–65% in a single reset — not the usual annual increment. ITC has responded with a phased price hike rather than full pass-through, trying to protect volume share against illicit alternatives. Stock is now at ₹280, down 32% in 2026, recently hit a fresh 52-week low of ₹274.
This is the invalidation condition being tested in real time: will cigarette volume growth turn negative for two consecutive quarters?
Watching. If the price falls further and the thesis holds, a third lot is possible — entry price will be updated here when it happens. Q1 FY27 volume data remains the critical input before any conclusion.
This entry will be updated when something material changes — results, averaging, exit or thesis break. Not before
| Date | Update | Status |
|---|---|---|
| 07 May 2026 | Initial entry — Lot 1 at ₹307.55 | Active |
| 21 May 2026 | Q4 FY26 results — ₹8 final dividend declared (record date May 27). Profit decline is base effect from FY25 hotels demerger windfall. Cigarette business intact. Thesis holds. | Reviewed |
| 29 May 2026 | Lot 2 entered at ₹290.60. Price reached averaging zone ₹287-290. Thesis intact. | Active |
| 06 Jun 2026 | GST 2.0 thesis review — cigarette taxes up 60–65%, stock at ₹280, fresh 52W low ₹274. Thesis under active review. Watching. A third lot possible if price falls further — will update on entry. | Under Review |
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About the Author
Jonathan — Endurance athlete. Investor by discipline. I document real trades in real time — entry prices, thesis, risks and honest updates. No tips. No calls. Just disciplined thinking, publicly archived.
All views expressed are personal. This is not investment advice. Please consult a SEBI registered advisor before making investment decisions.