Few people on this planet know what it is to be truly despised. Can you blame them? I earn a living fronting an organization that kills 1200 people a day. Twelve hundred people. We're talking two jumbo jet plane loads of men, women and children. I mean, there's Attila, Genghis and me, Nick Naylor. The face of cigarettes, the Colonel Sanders of nicotine.
These iconic lines spoken by Aaron Eckhart's character in the 2005 film Thank You For Smoking perfectly capture the predicament of a tobacco-industry lobbyist. For many years, the stock of ITC—India’s largest tobacco company with interests in FMCG, hospitality, and other sectors —faced a similar dilemma. Considered a ‘sin stock’, its value wasn’t testament to its profitability. The cigarette business was the cash cow and conscientious investors became wary of associating themselves with a company earning money selling products known to be hazardous to public health. But over the past year, ITC’s stock has been a star performer at the bourses, significantly outperforming the indices. Yesterday, it closed at an all-time high of Rs 388. In today’s story, Anand uncovers the smoking gun behind the once despised stock’s extraordinary performance—the cigarette business itself. So, how did the cigarette business, which kept investors away for so many years, once again become a promising investment proposition? What role has the government played in this revival? Does the pro-activeness of customs and revenue officials in busting illicit-cigarette business have anything to do with this? Has the global wariness over environmental-social-governance (ESG) investment affected ITC's performance? And, more importantly, what does the future look like for ITC’s stock given that the government could again alter its tobacco policies at any time?
