ITC Shares Drop Over 3% After Large Block Trade; Declines Continue

Shares of ITC Ltd experienced a significant decline in trading on Thursday, dropping more than 3 percent as the stock extended losses for the third consecutive session. The fall followed a notable transaction involving a large block of shares exchanged in a single trade.

According to data from Bloomberg, approximately 366.7 million shares were traded in one large deal, representing around 2.93 percent of ITC’s total equity. The identities of the buyers and sellers involved in this transaction have not been disclosed, leaving market watchers to speculate on the motives behind the massive exchange.

The stock opened the day lower at ₹264 on the National Stock Exchange (NSE) and continued its slide, reaching an intraday low of ₹257.20. ITC emerged as the most actively traded stock on the NSE that day, both in terms of value and volume. More than 22 million shares changed hands, with the total turnover amounting to ₹576.87 crore.

By 10:35 AM, ITC shares were trading near the day’s low, down 3 percent at ₹257.45, highlighting sustained selling pressure. Over various time frames, ITC’s stock performance has lagged behind broader market trends. Data from the NSE shows that ITC shares have declined approximately 29 percent in the year 2026 alone. Over the past twelve months, the stock has fallen 36 percent, a steeper drop compared with the Nifty 50 index, which slumped 14.1 percent year-to-date and 10.4 percent over the last year. When viewed over a three-year horizon, ITC’s shares have lost about 42 percent of their value, while the Nifty 50 index has gained slightly above 14 percent.

In the context of these declines, some analysts have recently offered a more positive outlook. Global brokerage Citi upgraded ITC’s rating from "Sell" to "Buy," raising its target price to ₹300. Citi’s analysts believe that the period of earnings downgrades for ITC is nearing its end and that the company’s valuation now reflects a more favorable risk-reward balance.

Citi projects a 23 percent drop in ITC’s cigarette segment earnings before interest and taxes (EBIT) for the fiscal year 2027. This forecast takes into account the ongoing challenges from competition by other brands and illicit products. However, the brokerage expects a recovery starting in fiscal year 2028, as price adjustments take effect and margins normalize.

The brokerage also highlighted the impact of a tax increase implemented in February 2026. In response, ITC has taken mitigating steps such as strategic price hikes and product portfolio adjustments across its key business segments. Citi estimates that ITC has passed on roughly 75 percent of the tax increase to consumers via price adjustments. Additionally, ITC’s introduction of new product launches is designed to minimize customer attrition and prevent downtrading within its portfolio.

It is worth noting that the cigarette business accounts for over 40 percent of ITC’s total revenue, making it a crucial segment for the company’s financial health.

ITC Ltd is a diversified conglomerate with interests spanning FMCG, hotels, paperboards, packaging, agribusiness, and information technology. Its stock is closely watched due to the company’s prominent role in the Indian market and its exposure to regulatory and tax changes, particularly in the tobacco sector.

The recent large block trade and resulting stock decline underscore the volatility that can arise around major equity transactions. Investors will likely monitor how ITC’s management navigates competitive pressures and tax impacts in the coming quarters.

Disclaimer: The views and forecasts mentioned in this article are attributed to the respective brokerage analysts and do not reflect endorsement by Business Standard. Readers are advised to exercise their own judgment when considering investment decisions.