Cigarette-to-hotel conglomerate ITC Ltd has become the 11th listed Indian company with a market cap of more than Rs 5 trillion after its shares soared 21% this year to a record high.

The stock hit an all-time high of Rs 402.60 on the BSE, up as much as 1.1% intraday. The stock was trading at Rs 402.30 at 9:30 am, up 1.2% from its previous close, while its market capitalisation was Rs 5.01 trillion.

Reliance Industries Ltd, Tata Consultancy Services Ltd, HDFC Ltd, Infosys Ltd, ICICI Bank Ltd, Hindustan Unilever Ltd, Life Insurance Company of India, State Bank of India, HDFC Ltd and Bharti Airtel Ltd have achieved this milestone.

ITC’s impressive performance across all its business segments, including FMCG, paper and hotels, makes it an attractive choice for investors, especially given the current market challenges due to high inflation, unseasonal monsoons, persistently weak rural sales, and delays in commodity costs decline.

Investors view ITC as a defensive pick due to its steady cash flow and dividend. In addition, the company’s strong operating performance, supported by double-digit cigarette sales growth and a strong hotel business recovery, fundamentally enhanced its attractiveness.

Analysts say the ITC has shown resilience over the past few quarters despite an uncertain demand environment and persistent inflationary pressures. This resilience can be attributed to several factors, including the successful recovery of its core cigarette business in the post-pandemic era, continued double-digit growth in the non-cigarette FMCG business, and accelerated expansion in hotels and paperboard, paper and packaging (PPP) business.

The Finance Bill 2023 was recently amended to limit the maximum compensation duty on tobacco products at Rs 4,170 per 1,000 sticks plus 290% ad valorem duty. Fortunately, ITC’s cigarette business is not expected to be adversely affected by the change, analysts added.

With no price hikes expected in the foreseeable future and the government’s ongoing efforts to curb illicit cigarette sales, ITC is expected to maintain volume growth momentum in its cigarette business, analysts said. In addition, the company’s non-cigarette FMCG business is expected to maintain strong growth, the hotel business will usher in a significant recovery, and the PPP business will support stable growth. As a result, ITC expects to achieve double-digit revenue and PAT growth over the next two years.