Shares of cigarettes-to-hotels conglomerate, ITC Ltd soared over 4 percent and emerged as the second-biggest gainer on the Nifty 50 on July 23. This comes as investors rejoiced in the absence of a hike in tobacco taxation in the Union Budget 2024.
While the move was aligned with market expectations, the fact that the government did not tinker with tobacco taxation still played well for the company as it generates a major chunk of its revenue from its cigarette business.
Along with that, the several measures announced by the finance minister Nirmala Sitharaman to boost employment in the Union Budget 2024 also bode well for the company as it fueled hopes of a rise in demand for consumer staple products due to higher incomes.
"The government has five schemes to facilitate employment and skilling for 4.1 crore youth central outlay of Rs 2 lakh crore," Sitharaman said in her budget speech.
On top of that, the Budget also focused heavily on spurring a revival in the rural economy through several measures announced to support the agricultural industry. This is likely to give the much needed push to trigger a recovery in rural demand, which in turn works well for ITC as it has a major presence in the rural markets.
Meanwhile, aside from ITC, other consumption names like Tata Consumer Products, Hindustan Unilever and Dabur India were also up 3-4 percent. Consequently, the Nifty FMCG index was also the top sectoral gainer, surging 2.5 percent.
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