In a significant market shift, ITC Ltd has emerged as the third most valuable tobacco company globally, overtaking British American Tobacco (BAT). The transition follows a sell-off in BAT shares, underscoring ITC’s dynamic business diversification.
Q: Why has ITC Ltd become the third most valuable tobacco company globally, surpassing British American Tobacco (BAT)?
A: ITC’s ascent is attributed to its diversified business strategy, including FMCG, hotels, papers, and agri-products, contrasting with BAT’s challenges amid a $31.5 billion write-down on US cigarette brands.
Q: What is the key factor driving investor confidence in ITC?
A: ITC’s robust stock performance, gaining 34.7% in one year and 125.5% in three years, reflects investor optimism fueled by the company’s diversification, rising FMCG profitability, and growth in the hospitality segment.
Q: How does BAT’s significant stake in ITC impact its market dynamics?
A: BAT holds a 29.04% stake in ITC, valued at $19.9 billion, yet faces limitations due to India’s restrictions on foreign direct investment in tobacco. BAT’s stock struggles amid a global industry shift towards non-combustible products.
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