ITC shares rose higher in the morning session on February 2, the day after taxes on cigarettes and other tobacco products were not touched by the Minister of Finance Nirmala Sitharaman in the 2022-23 budget.

When the business of cigarettes or tobacco contributes more than 40 percent of the company’s income, the road is always changing carefully on the script in run-up with the budget in the midst of increasing taxes.

Sitharaman, however, does not make changes in taxes, which experts say are positive for ITC.

Stock traded at Rs 230, up RS 2.30, or 1.01 percent at 9:52 a.m. at BSE. It has touched the highest intraday RS 233 and Low Intraday Rs 229.50.

Investec has recommended purchases on shares with targets with Rs 258 per share, upside down 12 percent of the current market price. The broker felt that the status quo gave a stronger FY23 visibility and expected a gradual price increase by the company at FY23. Stable taxes also help the legal cigarette industry, he said.

Morgan Stanley has an overweight call with a target at Rs 251 per share, reversed 9 percent of the current level. “For the second year in a row, the budget stores the tobacco tax rate has not changed. This eliminates one of the overhangs in stock and must increase investor confidence,” said the research company.

Jefferies also have a buying call on shares with targets at Rs 300 per share, upside down 30 percent of the current level. The research company felt that it was relief for ITC because the union budget had made taxes unchanged in cigarettes that added that buoyancy in the GST trend was also positive. “This will see EPS at 11% CAGR and at attractive prices,” Jefferies said.