ITC shares gained more than 4 percent to close at Rs 270 on the BSE Monday after the GST Council kept tax rates on cigarettes unchanged in its meeting on Saturday.
“No mention of cigarette taxation in GST meet provides upside trigger for the stock,” Deutsche Bank said while maintaining Buy call on the stock.
ITC remains top pick in staples alongside HUL, Dabur, Nestle, GSK Consumer, it added.
The research house said the reprieve for cigarette industry can trigger ITC stock’s P/E rerating in the interim.
Cigarette business contributed around 40-45 percent to total revenue of the ITC.
Meanwhile, the GST Council headed by Finance Minister Arun Jaitley approved the rollout of inter-state e-Way bill from April 1, deferred the liability to pay tax on reverse charge mechanism until June 30 and extended tax exemption benefits to exporters for another six months.